Correlation Between Beijing Baolande and China Life
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By analyzing existing cross correlation between Beijing Baolande Software and China Life Insurance, you can compare the effects of market volatilities on Beijing Baolande 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 Beijing Baolande with a short position of China Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Baolande and China Life.
Diversification Opportunities for Beijing Baolande and China Life
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Beijing and China is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Baolande Software 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 Beijing Baolande 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 Beijing Baolande Software 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 Beijing Baolande i.e., Beijing Baolande and China Life go up and down completely randomly.
Pair Corralation between Beijing Baolande and China Life
Assuming the 90 days trading horizon Beijing Baolande Software is expected to under-perform the China Life. In addition to that, Beijing Baolande is 2.24 times more volatile than China Life Insurance. It trades about -0.17 of its total potential returns per unit of risk. China Life Insurance is currently generating about -0.23 per unit of volatility. If you would invest 4,248 in China Life Insurance on October 25, 2024 and sell it today you would lose (333.00) from holding China Life Insurance or give up 7.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Baolande Software vs. China Life Insurance
Performance |
| Timeline |
| Beijing Baolande Software |
| China Life Insurance |
Beijing Baolande and China Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Baolande and China Life
The main advantage of trading using opposite Beijing Baolande and China Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Baolande 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.| Beijing Baolande vs. Kweichow Moutai Co | Beijing Baolande vs. NAURA Technology Group | Beijing Baolande vs. APT Medical | Beijing Baolande vs. BYD Co Ltd |
| 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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