Correlation Between China Life and Xian LONGi
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By analyzing existing cross correlation between China Life Insurance and Xian LONGi Silicon, you can compare the effects of market volatilities on China Life and Xian LONGi 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 Xian LONGi. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and Xian LONGi.
Diversification Opportunities for China Life and Xian LONGi
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between China and Xian is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and Xian LONGi Silicon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xian LONGi Silicon 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 Xian LONGi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xian LONGi Silicon has no effect on the direction of China Life i.e., China Life and Xian LONGi go up and down completely randomly.
Pair Corralation between China Life and Xian LONGi
Assuming the 90 days trading horizon China Life Insurance is expected to generate 0.77 times more return on investment than Xian LONGi. However, China Life Insurance is 1.3 times less risky than Xian LONGi. It trades about 0.1 of its potential returns per unit of risk. Xian LONGi Silicon is currently generating about 0.02 per unit of risk. If you would invest 3,166 in China Life Insurance on September 3, 2024 and sell it today you would earn a total of 1,044 from holding China Life Insurance or generate 32.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Life Insurance vs. Xian LONGi Silicon
Performance |
| Timeline |
| China Life Insurance |
| Xian LONGi Silicon |
China Life and Xian LONGi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Life and Xian LONGi
The main advantage of trading using opposite China Life and Xian LONGi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life position performs unexpectedly, Xian LONGi 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 Xian LONGi will offset losses from the drop in Xian LONGi's long position.| China Life vs. Chongqing Road Bridge | China Life vs. Wuhan Xianglong Power | China Life vs. Empyrean Technology Co | China Life vs. Yuanjie Semiconductor Technology |
| Xian LONGi vs. Yangmei Chemical Co | Xian LONGi vs. China Life Insurance | Xian LONGi vs. Tianshui Huatian Technology | Xian LONGi vs. Guangzhou Jointas Chemical |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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