Correlation Between Zhongyin Babi and China Life
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By analyzing existing cross correlation between Zhongyin Babi Food and China Life Insurance, you can compare the effects of market volatilities on Zhongyin Babi 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 Zhongyin Babi with a short position of China Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhongyin Babi and China Life.
Diversification Opportunities for Zhongyin Babi and China Life
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Zhongyin and China is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Zhongyin Babi Food 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 Zhongyin Babi 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 Zhongyin Babi Food 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 Zhongyin Babi i.e., Zhongyin Babi and China Life go up and down completely randomly.
Pair Corralation between Zhongyin Babi and China Life
Assuming the 90 days trading horizon Zhongyin Babi Food is expected to generate 1.15 times more return on investment than China Life. However, Zhongyin Babi is 1.15 times more volatile than China Life Insurance. It trades about -0.19 of its potential returns per unit of risk. China Life Insurance is currently generating about -0.23 per unit of risk. If you would invest 1,791 in Zhongyin Babi Food on October 25, 2024 and sell it today you would lose (133.00) from holding Zhongyin Babi Food or give up 7.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhongyin Babi Food vs. China Life Insurance
Performance |
| Timeline |
| Zhongyin Babi Food |
| China Life Insurance |
Zhongyin Babi and China Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhongyin Babi and China Life
The main advantage of trading using opposite Zhongyin Babi and China Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhongyin Babi 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.| Zhongyin Babi vs. Agricultural Bank of | Zhongyin Babi vs. Postal Savings Bank | Zhongyin Babi vs. Bank of Communications | Zhongyin Babi vs. China Merchants Bank |
| China Life vs. Bank of China | China Life vs. Kweichow Moutai Co | China Life vs. PetroChina Co Ltd | China Life vs. Bank of Communications |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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