Correlation Between China Life and National Silicon
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By analyzing existing cross correlation between China Life Insurance and National Silicon Industry, you can compare the effects of market volatilities on China Life and National Silicon 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 National Silicon. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and National Silicon.
Diversification Opportunities for China Life and National Silicon
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between China and National is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and National Silicon Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Silicon Industry 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 National Silicon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Silicon Industry has no effect on the direction of China Life i.e., China Life and National Silicon go up and down completely randomly.
Pair Corralation between China Life and National Silicon
Assuming the 90 days trading horizon China Life Insurance is expected to generate 0.86 times more return on investment than National Silicon. However, China Life Insurance is 1.16 times less risky than National Silicon. It trades about -0.06 of its potential returns per unit of risk. National Silicon Industry is currently generating about -0.14 per unit of risk. If you would invest 4,396 in China Life Insurance on August 26, 2024 and sell it today you would lose (219.00) from holding China Life Insurance or give up 4.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Life Insurance vs. National Silicon Industry
Performance |
| Timeline |
| China Life Insurance |
| National Silicon Industry |
China Life and National Silicon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Life and National Silicon
The main advantage of trading using opposite China Life and National Silicon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life position performs unexpectedly, National Silicon 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 National Silicon will offset losses from the drop in National Silicon's long position.| China Life vs. Ming Yang Smart | China Life vs. 159681 | China Life vs. 159005 | China Life vs. Loctek Ergonomic Technology |
| National Silicon vs. Lutian Machinery Co | National Silicon vs. China Longyuan Power | National Silicon vs. Changshu Tongrun Auto | National Silicon vs. PetroChina Co Ltd |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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