Correlation Between China Life and Shanghai Shibei
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By analyzing existing cross correlation between China Life Insurance and Shanghai Shibei Hi Tech, you can compare the effects of market volatilities on China Life and Shanghai Shibei 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 Shanghai Shibei. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and Shanghai Shibei.
Diversification Opportunities for China Life and Shanghai Shibei
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Shanghai is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and Shanghai Shibei Hi Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Shibei Hi 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 Shanghai Shibei. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Shibei Hi has no effect on the direction of China Life i.e., China Life and Shanghai Shibei go up and down completely randomly.
Pair Corralation between China Life and Shanghai Shibei
Assuming the 90 days trading horizon China Life is expected to generate 2.08 times less return on investment than Shanghai Shibei. But when comparing it to its historical volatility, China Life Insurance is 1.41 times less risky than Shanghai Shibei. It trades about 0.14 of its potential returns per unit of risk. Shanghai Shibei Hi Tech is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 12.00 in Shanghai Shibei Hi Tech on September 12, 2024 and sell it today you would earn a total of 8.00 from holding Shanghai Shibei Hi Tech or generate 66.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Life Insurance vs. Shanghai Shibei Hi Tech
Performance |
| Timeline |
| China Life Insurance |
| Shanghai Shibei Hi |
China Life and Shanghai Shibei Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Life and Shanghai Shibei
The main advantage of trading using opposite China Life and Shanghai Shibei positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life position performs unexpectedly, Shanghai Shibei 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 Shanghai Shibei will offset losses from the drop in Shanghai Shibei's long position.| China Life vs. BYD Co Ltd | China Life vs. China Mobile Limited | China Life vs. Agricultural Bank of | China Life vs. Industrial and Commercial |
| Shanghai Shibei vs. Lander Sports Development | Shanghai Shibei vs. Everdisplay Optronics Shanghai | Shanghai Shibei vs. Shanghai Yaoji Playing | Shanghai Shibei vs. China Life Insurance |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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