Correlation Between Chahua Modern and China Life
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By analyzing existing cross correlation between Chahua Modern Housewares and China Life Insurance, you can compare the effects of market volatilities on Chahua Modern 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 Chahua Modern with a short position of China Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chahua Modern and China Life.
Diversification Opportunities for Chahua Modern and China Life
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chahua and China is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Chahua Modern Housewares 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 Chahua Modern 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 Chahua Modern Housewares 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 Chahua Modern i.e., Chahua Modern and China Life go up and down completely randomly.
Pair Corralation between Chahua Modern and China Life
Assuming the 90 days trading horizon Chahua Modern Housewares is expected to generate 1.58 times more return on investment than China Life. However, Chahua Modern is 1.58 times more volatile than China Life Insurance. It trades about 0.08 of its potential returns per unit of risk. China Life Insurance is currently generating about 0.03 per unit of risk. If you would invest 840.00 in Chahua Modern Housewares on September 3, 2024 and sell it today you would earn a total of 1,347 from holding Chahua Modern Housewares or generate 160.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chahua Modern Housewares vs. China Life Insurance
Performance |
| Timeline |
| Chahua Modern Housewares |
| China Life Insurance |
Chahua Modern and China Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chahua Modern and China Life
The main advantage of trading using opposite Chahua Modern and China Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chahua Modern 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.| Chahua Modern vs. PetroChina Co Ltd | Chahua Modern vs. China Mobile Limited | Chahua Modern vs. Industrial and Commercial | Chahua Modern vs. China Life Insurance |
| China Life vs. Chongqing Road Bridge | China Life vs. Wuhan Xianglong Power | China Life vs. Empyrean Technology Co | China Life vs. Yuanjie Semiconductor Technology |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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