Correlation Between Postal Savings and China Life
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By analyzing existing cross correlation between Postal Savings Bank and China Life Insurance, you can compare the effects of market volatilities on Postal Savings and China Life 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 Postal Savings with a short position of China Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Postal Savings and China Life.
Diversification Opportunities for Postal Savings and China Life
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Postal and China is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Postal Savings Bank and China Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Life Insurance and Postal Savings 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 Postal Savings Bank are associated (or correlated) with China Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Life Insurance has no effect on the direction of Postal Savings i.e., Postal Savings and China Life go up and down completely randomly.
Pair Corralation between Postal Savings and China Life
Assuming the 90 days trading horizon Postal Savings Bank is expected to generate 0.35 times more return on investment than China Life. However, Postal Savings Bank is 2.88 times less risky than China Life. It trades about 0.04 of its potential returns per unit of risk. China Life Insurance is currently generating about -0.01 per unit of risk. If you would invest 527.00 in Postal Savings Bank on August 31, 2024 and sell it today you would earn a total of 4.00 from holding Postal Savings Bank or generate 0.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Postal Savings Bank vs. China Life Insurance
Performance |
| Timeline |
| Postal Savings Bank |
| China Life Insurance |
Postal Savings and China Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Postal Savings and China Life
The main advantage of trading using opposite Postal Savings and China Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Postal Savings position performs unexpectedly, China Life 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 China Life will offset losses from the drop in China Life's long position.| Postal Savings vs. Lotus Health Group | Postal Savings vs. Nanjing Putian Telecommunications | Postal Savings vs. Spring Airlines Co | Postal Savings vs. Fiberhome Telecommunication Technologies |
| China Life vs. XinJiang GuoTong Pipeline | China Life vs. Shandong Hongchuang Aluminum | China Life vs. Zhejiang Yongjin Metal | China Life vs. China National Software |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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