Correlation Between China Life and Niutech Environment
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By analyzing existing cross correlation between China Life Insurance and Niutech Environment Technology, you can compare the effects of market volatilities on China Life and Niutech Environment 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 Niutech Environment. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and Niutech Environment.
Diversification Opportunities for China Life and Niutech Environment
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between China and Niutech is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and Niutech Environment Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Niutech Environment 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 Niutech Environment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Niutech Environment has no effect on the direction of China Life i.e., China Life and Niutech Environment go up and down completely randomly.
Pair Corralation between China Life and Niutech Environment
Assuming the 90 days trading horizon China Life Insurance is expected to generate 0.81 times more return on investment than Niutech Environment. However, China Life Insurance is 1.24 times less risky than Niutech Environment. It trades about 0.11 of its potential returns per unit of risk. Niutech Environment Technology is currently generating about 0.03 per unit of risk. If you would invest 3,158 in China Life Insurance on September 1, 2024 and sell it today you would earn a total of 1,052 from holding China Life Insurance or generate 33.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Life Insurance vs. Niutech Environment Technology
Performance |
| Timeline |
| China Life Insurance |
| Niutech Environment |
China Life and Niutech Environment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Life and Niutech Environment
The main advantage of trading using opposite China Life and Niutech Environment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life position performs unexpectedly, Niutech Environment 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 Niutech Environment will offset losses from the drop in Niutech Environment's long position.| China Life vs. Industrial and Commercial | China Life vs. China Construction Bank | China Life vs. Bank of China | China Life vs. Agricultural Bank of |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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