Correlation Between China Life and Senci Electric
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By analyzing existing cross correlation between China Life Insurance and Senci Electric Machinery, you can compare the effects of market volatilities on China Life and Senci Electric 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 Senci Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and Senci Electric.
Diversification Opportunities for China Life and Senci Electric
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Senci is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and Senci Electric Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senci Electric Machinery 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 Senci Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senci Electric Machinery has no effect on the direction of China Life i.e., China Life and Senci Electric go up and down completely randomly.
Pair Corralation between China Life and Senci Electric
Assuming the 90 days trading horizon China Life Insurance is expected to generate 0.99 times more return on investment than Senci Electric. However, China Life Insurance is 1.01 times less risky than Senci Electric. It trades about 0.11 of its potential returns per unit of risk. Senci Electric Machinery is currently generating about 0.1 per unit of risk. If you would invest 3,135 in China Life Insurance on September 27, 2024 and sell it today you would earn a total of 1,135 from holding China Life Insurance or generate 36.2% 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. Senci Electric Machinery
Performance |
| Timeline |
| China Life Insurance |
| Senci Electric Machinery |
China Life and Senci Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Life and Senci Electric
The main advantage of trading using opposite China Life and Senci Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life position performs unexpectedly, Senci Electric 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 Senci Electric will offset losses from the drop in Senci Electric's long position.| China Life vs. Kweichow Moutai Co | China Life vs. Shenzhen Mindray Bio Medical | China Life vs. Jiangsu Pacific Quartz | China Life vs. G bits Network Technology |
| Senci Electric vs. Industrial and Commercial | Senci Electric vs. Agricultural Bank of | Senci Electric vs. China Construction Bank | Senci Electric vs. Bank of China |
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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