Correlation Between China Life and ACM Research
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By analyzing existing cross correlation between China Life Insurance and ACM Research Shanghai, you can compare the effects of market volatilities on China Life and ACM Research 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 ACM Research. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and ACM Research.
Diversification Opportunities for China Life and ACM Research
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and ACM is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and ACM Research Shanghai in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACM Research Shanghai 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 ACM Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACM Research Shanghai has no effect on the direction of China Life i.e., China Life and ACM Research go up and down completely randomly.
Pair Corralation between China Life and ACM Research
Assuming the 90 days trading horizon China Life Insurance is expected to generate 1.09 times more return on investment than ACM Research. However, China Life is 1.09 times more volatile than ACM Research Shanghai. It trades about -0.34 of its potential returns per unit of risk. ACM Research Shanghai is currently generating about -0.41 per unit of risk. If you would invest 4,215 in China Life Insurance on October 14, 2024 and sell it today you would lose (449.00) from holding China Life Insurance or give up 10.65% 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. ACM Research Shanghai
Performance |
| Timeline |
| China Life Insurance |
| ACM Research Shanghai |
China Life and ACM Research Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Life and ACM Research
The main advantage of trading using opposite China Life and ACM Research positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life position performs unexpectedly, ACM Research 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 ACM Research will offset losses from the drop in ACM Research's long position.| China Life vs. Shuhua Sports Co | China Life vs. Omnijoi Media Corp | China Life vs. Jiajia Food Group | China Life vs. JiShi Media Co |
| ACM Research vs. Shuhua Sports Co | ACM Research vs. Guosheng Financial Holding | ACM Research vs. Shanghai Yaoji Playing | ACM Research vs. Postal Savings Bank |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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