Correlation Between China Life and Guangzhou Fangbang
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By analyzing existing cross correlation between China Life Insurance and Guangzhou Fangbang Electronics, you can compare the effects of market volatilities on China Life and Guangzhou Fangbang 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 Guangzhou Fangbang. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and Guangzhou Fangbang.
Diversification Opportunities for China Life and Guangzhou Fangbang
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Guangzhou is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and Guangzhou Fangbang Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Fangbang 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 Guangzhou Fangbang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Fangbang has no effect on the direction of China Life i.e., China Life and Guangzhou Fangbang go up and down completely randomly.
Pair Corralation between China Life and Guangzhou Fangbang
Assuming the 90 days trading horizon China Life Insurance is expected to generate 0.51 times more return on investment than Guangzhou Fangbang. However, China Life Insurance is 1.98 times less risky than Guangzhou Fangbang. It trades about 0.02 of its potential returns per unit of risk. Guangzhou Fangbang Electronics is currently generating about 0.0 per unit of risk. If you would invest 3,430 in China Life Insurance on October 16, 2024 and sell it today you would earn a total of 313.00 from holding China Life Insurance or generate 9.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Life Insurance vs. Guangzhou Fangbang Electronics
Performance |
| Timeline |
| China Life Insurance |
| Guangzhou Fangbang |
China Life and Guangzhou Fangbang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Life and Guangzhou Fangbang
The main advantage of trading using opposite China Life and Guangzhou Fangbang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life position performs unexpectedly, Guangzhou Fangbang 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 Guangzhou Fangbang will offset losses from the drop in Guangzhou Fangbang's long position.| China Life vs. Tianshan Aluminum Group | China Life vs. Guangzhou Zhujiang Brewery | China Life vs. Eastroc Beverage Group | China Life vs. Telling Telecommunication Holding |
| Guangzhou Fangbang vs. Universal Scientific Industrial | Guangzhou Fangbang vs. Jiaozuo Wanfang Aluminum | Guangzhou Fangbang vs. Porton Fine Chemicals | Guangzhou Fangbang vs. Shanghai Yanpu Metal |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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