Correlation Between China Life and Beijing YanDong
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By analyzing existing cross correlation between China Life Insurance and Beijing YanDong MicroElectronic, you can compare the effects of market volatilities on China Life and Beijing YanDong 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 Beijing YanDong. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and Beijing YanDong.
Diversification Opportunities for China Life and Beijing YanDong
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between China and Beijing is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and Beijing YanDong MicroElectroni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing YanDong Micr 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 Beijing YanDong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing YanDong Micr has no effect on the direction of China Life i.e., China Life and Beijing YanDong go up and down completely randomly.
Pair Corralation between China Life and Beijing YanDong
Assuming the 90 days trading horizon China Life Insurance is expected to under-perform the Beijing YanDong. But the stock apears to be less risky and, when comparing its historical volatility, China Life Insurance is 1.86 times less risky than Beijing YanDong. The stock trades about -0.34 of its potential returns per unit of risk. The Beijing YanDong MicroElectronic is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest 2,266 in Beijing YanDong MicroElectronic on October 11, 2024 and sell it today you would lose (282.00) from holding Beijing YanDong MicroElectronic or give up 12.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Life Insurance vs. Beijing YanDong MicroElectroni
Performance |
| Timeline |
| China Life Insurance |
| Beijing YanDong Micr |
China Life and Beijing YanDong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Life and Beijing YanDong
The main advantage of trading using opposite China Life and Beijing YanDong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life position performs unexpectedly, Beijing YanDong 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 Beijing YanDong will offset losses from the drop in Beijing YanDong's long position.| China Life vs. Sanbo Hospital Management | China Life vs. China Reform Health | China Life vs. Sinomach General Machinery | China Life vs. Jinlong Machinery Electronic |
| Beijing YanDong vs. Ping An Insurance | Beijing YanDong vs. China Life Insurance | Beijing YanDong vs. Hubei Geoway Investment | Beijing YanDong vs. Penyao Environmental Protection |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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