Correlation Between China Life and Hefei Metalforming
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By analyzing existing cross correlation between China Life Insurance and Hefei Metalforming Mach, you can compare the effects of market volatilities on China Life and Hefei Metalforming 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 Hefei Metalforming. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and Hefei Metalforming.
Diversification Opportunities for China Life and Hefei Metalforming
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Hefei is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and Hefei Metalforming Mach in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hefei Metalforming Mach 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 Hefei Metalforming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hefei Metalforming Mach has no effect on the direction of China Life i.e., China Life and Hefei Metalforming go up and down completely randomly.
Pair Corralation between China Life and Hefei Metalforming
Assuming the 90 days trading horizon China Life is expected to generate 1.39 times less return on investment than Hefei Metalforming. But when comparing it to its historical volatility, China Life Insurance is 1.23 times less risky than Hefei Metalforming. It trades about 0.07 of its potential returns per unit of risk. Hefei Metalforming Mach is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 552.00 in Hefei Metalforming Mach on October 18, 2024 and sell it today you would earn a total of 159.00 from holding Hefei Metalforming Mach or generate 28.8% 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. Hefei Metalforming Mach
Performance |
| Timeline |
| China Life Insurance |
| Hefei Metalforming Mach |
China Life and Hefei Metalforming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Life and Hefei Metalforming
The main advantage of trading using opposite China Life and Hefei Metalforming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life position performs unexpectedly, Hefei Metalforming 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 Hefei Metalforming will offset losses from the drop in Hefei Metalforming's long position.| China Life vs. Guangzhou Restaurants Group | China Life vs. Sichuan Fulin Transportation | China Life vs. Caihong Display Devices | China Life vs. Shandong Hi Speed RoadBridge |
| Hefei Metalforming vs. Guangdong Jingyi Metal | Hefei Metalforming vs. Anhui Transport Consulting | Hefei Metalforming vs. Jiaozuo Wanfang Aluminum | Hefei Metalforming vs. China Life Insurance |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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