Correlation Between China Life and Guotai Epoint
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By analyzing existing cross correlation between China Life Insurance and Guotai Epoint Software, you can compare the effects of market volatilities on China Life and Guotai Epoint 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 Guotai Epoint. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and Guotai Epoint.
Diversification Opportunities for China Life and Guotai Epoint
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Guotai is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and Guotai Epoint Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guotai Epoint Software 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 Guotai Epoint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guotai Epoint Software has no effect on the direction of China Life i.e., China Life and Guotai Epoint go up and down completely randomly.
Pair Corralation between China Life and Guotai Epoint
Assuming the 90 days trading horizon China Life Insurance is expected to generate 0.79 times more return on investment than Guotai Epoint. However, China Life Insurance is 1.27 times less risky than Guotai Epoint. It trades about -0.04 of its potential returns per unit of risk. Guotai Epoint Software is currently generating about -0.05 per unit of risk. If you would invest 4,210 in China Life Insurance on October 30, 2024 and sell it today you would lose (150.00) from holding China Life Insurance or give up 3.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Life Insurance vs. Guotai Epoint Software
Performance |
| Timeline |
| China Life Insurance |
| Guotai Epoint Software |
China Life and Guotai Epoint Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Life and Guotai Epoint
The main advantage of trading using opposite China Life and Guotai Epoint positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life position performs unexpectedly, Guotai Epoint 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 Guotai Epoint will offset losses from the drop in Guotai Epoint's long position.| China Life vs. BizConf Telecom Co | China Life vs. Shenzhen Zhongzhuang Construction | China Life vs. Agricultural Bank of | China Life vs. Wintao Communications Co |
| Guotai Epoint vs. Uroica Mining Safety | Guotai Epoint vs. Rising Nonferrous Metals | Guotai Epoint vs. Xiandai Investment Co | Guotai Epoint vs. Jiangsu Yueda Investment |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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