Correlation Between China Life and Xiamen Bank
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By analyzing existing cross correlation between China Life Insurance and Xiamen Bank Co, you can compare the effects of market volatilities on China Life and Xiamen Bank 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 Xiamen Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and Xiamen Bank.
Diversification Opportunities for China Life and Xiamen Bank
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Xiamen is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and Xiamen Bank Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiamen Bank 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 Xiamen Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiamen Bank has no effect on the direction of China Life i.e., China Life and Xiamen Bank go up and down completely randomly.
Pair Corralation between China Life and Xiamen Bank
Assuming the 90 days trading horizon China Life Insurance is expected to under-perform the Xiamen Bank. In addition to that, China Life is 1.78 times more volatile than Xiamen Bank Co. It trades about -0.05 of its total potential returns per unit of risk. Xiamen Bank Co is currently generating about 0.15 per unit of volatility. If you would invest 520.00 in Xiamen Bank Co on August 29, 2024 and sell it today you would earn a total of 30.00 from holding Xiamen Bank Co or generate 5.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Life Insurance vs. Xiamen Bank Co
Performance |
| Timeline |
| China Life Insurance |
| Xiamen Bank |
China Life and Xiamen Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Life and Xiamen Bank
The main advantage of trading using opposite China Life and Xiamen Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life position performs unexpectedly, Xiamen Bank 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 Xiamen Bank will offset losses from the drop in Xiamen Bank's long position.| China Life vs. Ming Yang Smart | China Life vs. 159681 | China Life vs. 159005 | China Life vs. Loctek Ergonomic Technology |
| Xiamen Bank vs. China Nonferrous Metal | Xiamen Bank vs. Pengxin International Mining | Xiamen Bank vs. Guangzhou Haozhi Industrial | Xiamen Bank vs. Miracll Chemicals Co |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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