Correlation Between China Life and Semiconductor Manufacturing
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By analyzing existing cross correlation between China Life Insurance and Semiconductor Manufacturing Intl, you can compare the effects of market volatilities on China Life and Semiconductor Manufacturing 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 Semiconductor Manufacturing. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and Semiconductor Manufacturing.
Diversification Opportunities for China Life and Semiconductor Manufacturing
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between China and Semiconductor is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and Semiconductor Manufacturing In in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semiconductor Manufacturing 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 Semiconductor Manufacturing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semiconductor Manufacturing has no effect on the direction of China Life i.e., China Life and Semiconductor Manufacturing go up and down completely randomly.
Pair Corralation between China Life and Semiconductor Manufacturing
Assuming the 90 days trading horizon China Life Insurance is expected to under-perform the Semiconductor Manufacturing. But the stock apears to be less risky and, when comparing its historical volatility, China Life Insurance is 2.13 times less risky than Semiconductor Manufacturing. The stock trades about -0.3 of its potential returns per unit of risk. The Semiconductor Manufacturing Intl is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 8,150 in Semiconductor Manufacturing Intl on October 15, 2024 and sell it today you would earn a total of 1,168 from holding Semiconductor Manufacturing Intl or generate 14.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Life Insurance vs. Semiconductor Manufacturing In
Performance |
| Timeline |
| China Life Insurance |
| Semiconductor Manufacturing |
China Life and Semiconductor Manufacturing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Life and Semiconductor Manufacturing
The main advantage of trading using opposite China Life and Semiconductor Manufacturing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life position performs unexpectedly, Semiconductor Manufacturing 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 Semiconductor Manufacturing will offset losses from the drop in Semiconductor Manufacturing's long position.| China Life vs. State Grid InformationCommunication | China Life vs. Bank of Communications | China Life vs. Anji Foodstuff Co | China Life vs. Wintao Communications Co |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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