Correlation Between Shanghai Action and China Life
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By analyzing existing cross correlation between Shanghai Action Education and China Life Insurance, you can compare the effects of market volatilities on Shanghai Action 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 Shanghai Action with a short position of China Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Action and China Life.
Diversification Opportunities for Shanghai Action and China Life
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and China is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Action Education 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 Shanghai Action 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 Shanghai Action Education 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 Shanghai Action i.e., Shanghai Action and China Life go up and down completely randomly.
Pair Corralation between Shanghai Action and China Life
Assuming the 90 days trading horizon Shanghai Action Education is expected to generate 1.39 times more return on investment than China Life. However, Shanghai Action is 1.39 times more volatile than China Life Insurance. It trades about 0.06 of its potential returns per unit of risk. China Life Insurance is currently generating about -0.13 per unit of risk. If you would invest 3,555 in Shanghai Action Education on September 12, 2024 and sell it today you would earn a total of 98.00 from holding Shanghai Action Education or generate 2.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Action Education vs. China Life Insurance
Performance |
| Timeline |
| Shanghai Action Education |
| China Life Insurance |
Shanghai Action and China Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Action and China Life
The main advantage of trading using opposite Shanghai Action and China Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Action 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.| Shanghai Action vs. Lutian Machinery Co | Shanghai Action vs. PetroChina Co Ltd | Shanghai Action vs. Bank of China | Shanghai Action vs. Gansu Jiu Steel |
| China Life vs. China Petroleum Chemical | China Life vs. PetroChina Co Ltd | China Life vs. China Mobile Limited | China Life vs. Industrial and Commercial |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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