Correlation Between China Life and Postal Savings
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By analyzing existing cross correlation between China Life Insurance and Postal Savings Bank, you can compare the effects of market volatilities on China Life and Postal Savings 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 Postal Savings. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and Postal Savings.
Diversification Opportunities for China Life and Postal Savings
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Postal is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and Postal Savings Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Postal Savings 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 Postal Savings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Postal Savings Bank has no effect on the direction of China Life i.e., China Life and Postal Savings go up and down completely randomly.
Pair Corralation between China Life and Postal Savings
Assuming the 90 days trading horizon China Life Insurance is expected to under-perform the Postal Savings. In addition to that, China Life is 2.63 times more volatile than Postal Savings Bank. It trades about -0.05 of its total potential returns per unit of risk. Postal Savings Bank is currently generating about -0.06 per unit of volatility. If you would invest 542.00 in Postal Savings Bank on August 29, 2024 and sell it today you would lose (9.00) from holding Postal Savings Bank or give up 1.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Life Insurance vs. Postal Savings Bank
Performance |
| Timeline |
| China Life Insurance |
| Postal Savings Bank |
China Life and Postal Savings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Life and Postal Savings
The main advantage of trading using opposite China Life and Postal Savings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life position performs unexpectedly, Postal Savings 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 Postal Savings will offset losses from the drop in Postal Savings' long position.| China Life vs. Ming Yang Smart | China Life vs. 159681 | China Life vs. 159005 | China Life vs. Loctek Ergonomic Technology |
| Postal Savings vs. Eastern Communications Co | Postal Savings vs. Guangdong Shenglu Telecommunication | Postal Savings vs. Jilin Jlu Communication | Postal Savings vs. Yingde Greatchem Chemicals |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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