Correlation Between China Life and Eastern Air
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By analyzing existing cross correlation between China Life Insurance and Eastern Air Logistics, you can compare the effects of market volatilities on China Life and Eastern Air 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 Eastern Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and Eastern Air.
Diversification Opportunities for China Life and Eastern Air
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Eastern is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and Eastern Air Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Air Logistics 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 Eastern Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Air Logistics has no effect on the direction of China Life i.e., China Life and Eastern Air go up and down completely randomly.
Pair Corralation between China Life and Eastern Air
Assuming the 90 days trading horizon China Life Insurance is expected to generate 1.25 times more return on investment than Eastern Air. However, China Life is 1.25 times more volatile than Eastern Air Logistics. It trades about 0.13 of its potential returns per unit of risk. Eastern Air Logistics is currently generating about 0.0 per unit of risk. If you would invest 3,338 in China Life Insurance on August 30, 2024 and sell it today you would earn a total of 824.00 from holding China Life Insurance or generate 24.69% 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. Eastern Air Logistics
Performance |
| Timeline |
| China Life Insurance |
| Eastern Air Logistics |
China Life and Eastern Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Life and Eastern Air
The main advantage of trading using opposite China Life and Eastern Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life position performs unexpectedly, Eastern Air 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 Eastern Air will offset losses from the drop in Eastern Air's long position.| China Life vs. XinJiang GuoTong Pipeline | China Life vs. Shandong Hongchuang Aluminum | China Life vs. Zhejiang Yongjin Metal | China Life vs. China National Software |
| Eastern Air vs. GRINM Semiconductor Materials | Eastern Air vs. Jonjee Hi tech Industrial | Eastern Air vs. Eastern Communications Co | Eastern Air vs. Zhejiang JIULI Hi tech |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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