Correlation Between China Life and Dongxing Sec
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By analyzing existing cross correlation between China Life Insurance and Dongxing Sec Co, you can compare the effects of market volatilities on China Life and Dongxing Sec 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 Dongxing Sec. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and Dongxing Sec.
Diversification Opportunities for China Life and Dongxing Sec
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between China and Dongxing is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and Dongxing Sec Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongxing Sec 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 Dongxing Sec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongxing Sec has no effect on the direction of China Life i.e., China Life and Dongxing Sec go up and down completely randomly.
Pair Corralation between China Life and Dongxing Sec
Assuming the 90 days trading horizon China Life is expected to generate 1.49 times less return on investment than Dongxing Sec. In addition to that, China Life is 1.03 times more volatile than Dongxing Sec Co. It trades about 0.03 of its total potential returns per unit of risk. Dongxing Sec Co is currently generating about 0.04 per unit of volatility. If you would invest 823.00 in Dongxing Sec Co on August 30, 2024 and sell it today you would earn a total of 301.00 from holding Dongxing Sec Co or generate 36.57% 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. Dongxing Sec Co
Performance |
| Timeline |
| China Life Insurance |
| Dongxing Sec |
China Life and Dongxing Sec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Life and Dongxing Sec
The main advantage of trading using opposite China Life and Dongxing Sec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life position performs unexpectedly, Dongxing Sec 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 Dongxing Sec will offset losses from the drop in Dongxing Sec's long position.| China Life vs. City Development Environment | China Life vs. Central Plains Environment | China Life vs. By health | China Life vs. Zhongshan Public Utilities |
| Dongxing Sec vs. Kweichow Moutai Co | Dongxing Sec vs. Contemporary Amperex Technology | Dongxing Sec vs. G bits Network Technology | Dongxing Sec vs. BYD Co Ltd |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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