Correlation Between China Life and Eastroc Beverage
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By analyzing existing cross correlation between China Life Insurance and Eastroc Beverage Group, you can compare the effects of market volatilities on China Life and Eastroc Beverage 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 Eastroc Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and Eastroc Beverage.
Diversification Opportunities for China Life and Eastroc Beverage
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between China and Eastroc is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and Eastroc Beverage Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastroc Beverage 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 Eastroc Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastroc Beverage has no effect on the direction of China Life i.e., China Life and Eastroc Beverage go up and down completely randomly.
Pair Corralation between China Life and Eastroc Beverage
Assuming the 90 days trading horizon China Life is expected to generate 3.36 times less return on investment than Eastroc Beverage. In addition to that, China Life is 1.15 times more volatile than Eastroc Beverage Group. It trades about 0.02 of its total potential returns per unit of risk. Eastroc Beverage Group is currently generating about 0.1 per unit of volatility. If you would invest 12,027 in Eastroc Beverage Group on August 31, 2024 and sell it today you would earn a total of 9,356 from holding Eastroc Beverage Group or generate 77.79% 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. Eastroc Beverage Group
Performance |
| Timeline |
| China Life Insurance |
| Eastroc Beverage |
China Life and Eastroc Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Life and Eastroc Beverage
The main advantage of trading using opposite China Life and Eastroc Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life position performs unexpectedly, Eastroc Beverage 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 Eastroc Beverage will offset losses from the drop in Eastroc Beverage's long position.| China Life vs. XinJiang GuoTong Pipeline | China Life vs. Shandong Hongchuang Aluminum | China Life vs. Zhejiang Yongjin Metal | China Life vs. China National Software |
| Eastroc Beverage vs. Lutian Machinery Co | Eastroc Beverage vs. PetroChina Co Ltd | Eastroc Beverage vs. Bank of China | Eastroc Beverage vs. Gansu Jiu Steel |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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