Correlation Between China Life and Beijing Sanyuan
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By analyzing existing cross correlation between China Life Insurance and Beijing Sanyuan Foods, you can compare the effects of market volatilities on China Life and Beijing Sanyuan and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in China Life with a short position of Beijing Sanyuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and Beijing Sanyuan.
Diversification Opportunities for China Life and Beijing Sanyuan
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between China and Beijing is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and Beijing Sanyuan Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Sanyuan Foods and China Life is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on China Life Insurance are associated (or correlated) with Beijing Sanyuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Sanyuan Foods has no effect on the direction of China Life i.e., China Life and Beijing Sanyuan go up and down completely randomly.
Pair Corralation between China Life and Beijing Sanyuan
Assuming the 90 days trading horizon China Life Insurance is expected to under-perform the Beijing Sanyuan. In addition to that, China Life is 2.02 times more volatile than Beijing Sanyuan Foods. It trades about -0.06 of its total potential returns per unit of risk. Beijing Sanyuan Foods is currently generating about -0.07 per unit of volatility. If you would invest 440.00 in Beijing Sanyuan Foods on August 28, 2024 and sell it today you would lose (12.00) from holding Beijing Sanyuan Foods or give up 2.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Life Insurance vs. Beijing Sanyuan Foods
Performance |
| Timeline |
| China Life Insurance |
| Beijing Sanyuan Foods |
China Life and Beijing Sanyuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Life and Beijing Sanyuan
The main advantage of trading using opposite China Life and Beijing Sanyuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life position performs unexpectedly, Beijing Sanyuan can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Beijing Sanyuan will offset losses from the drop in Beijing Sanyuan's long position.| China Life vs. Ming Yang Smart | China Life vs. 159681 | China Life vs. 159005 | China Life vs. Loctek Ergonomic Technology |
| Beijing Sanyuan vs. China Petroleum Chemical | Beijing Sanyuan vs. PetroChina Co Ltd | Beijing Sanyuan vs. China State Construction | Beijing Sanyuan vs. China Railway Group |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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