Correlation Between China Life and China Aluminum
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By analyzing existing cross correlation between China Life Insurance and China Aluminum International, you can compare the effects of market volatilities on China Life and China Aluminum 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 China Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and China Aluminum.
Diversification Opportunities for China Life and China Aluminum
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between China and China is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and China Aluminum International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Aluminum Inter 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 China Aluminum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Aluminum Inter has no effect on the direction of China Life i.e., China Life and China Aluminum go up and down completely randomly.
Pair Corralation between China Life and China Aluminum
Assuming the 90 days trading horizon China Life Insurance is expected to generate 0.83 times more return on investment than China Aluminum. However, China Life Insurance is 1.2 times less risky than China Aluminum. It trades about 0.03 of its potential returns per unit of risk. China Aluminum International is currently generating about 0.01 per unit of risk. If you would invest 3,586 in China Life Insurance on September 13, 2024 and sell it today you would earn a total of 740.00 from holding China Life Insurance or generate 20.64% 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. China Aluminum International
Performance |
| Timeline |
| China Life Insurance |
| China Aluminum Inter |
China Life and China Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Life and China Aluminum
The main advantage of trading using opposite China Life and China Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life position performs unexpectedly, China Aluminum 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 China Aluminum will offset losses from the drop in China Aluminum's long position.| China Life vs. BYD Co Ltd | China Life vs. China Mobile Limited | China Life vs. Agricultural Bank of | China Life vs. Industrial and Commercial |
| China Aluminum vs. Ming Yang Smart | China Aluminum vs. 159681 | China Aluminum vs. 159005 | China Aluminum vs. Loctek Ergonomic 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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