Correlation Between China Life and Long Yuan
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By analyzing existing cross correlation between China Life Insurance and Long Yuan Construction, you can compare the effects of market volatilities on China Life and Long Yuan 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 Long Yuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and Long Yuan.
Diversification Opportunities for China Life and Long Yuan
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Long is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and Long Yuan Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Long Yuan Construction 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 Long Yuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Long Yuan Construction has no effect on the direction of China Life i.e., China Life and Long Yuan go up and down completely randomly.
Pair Corralation between China Life and Long Yuan
Assuming the 90 days trading horizon China Life Insurance is expected to generate 0.79 times more return on investment than Long Yuan. However, China Life Insurance is 1.26 times less risky than Long Yuan. It trades about 0.03 of its potential returns per unit of risk. Long Yuan Construction is currently generating about -0.01 per unit of risk. If you would invest 3,533 in China Life Insurance on September 12, 2024 and sell it today you would earn a total of 890.00 from holding China Life Insurance or generate 25.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Life Insurance vs. Long Yuan Construction
Performance |
| Timeline |
| China Life Insurance |
| Long Yuan Construction |
China Life and Long Yuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Life and Long Yuan
The main advantage of trading using opposite China Life and Long Yuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life position performs unexpectedly, Long Yuan 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 Long Yuan will offset losses from the drop in Long Yuan's long position.| China Life vs. China Petroleum Chemical | China Life vs. PetroChina Co Ltd | China Life vs. China Mobile Limited | China Life vs. Industrial and Commercial |
| Long Yuan vs. Saurer Intelligent Technology | Long Yuan vs. Tianshui Huatian Technology | Long Yuan vs. HUAQIN TECHNOLOGY LTD | Long Yuan vs. Northking Information Technology |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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