Correlation Between Cabio Biotech and China Life
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By analyzing existing cross correlation between Cabio Biotech Wuhan and China Life Insurance, you can compare the effects of market volatilities on Cabio Biotech 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 Cabio Biotech with a short position of China Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cabio Biotech and China Life.
Diversification Opportunities for Cabio Biotech and China Life
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cabio and China is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Cabio Biotech Wuhan 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 Cabio Biotech 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 Cabio Biotech Wuhan 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 Cabio Biotech i.e., Cabio Biotech and China Life go up and down completely randomly.
Pair Corralation between Cabio Biotech and China Life
Assuming the 90 days trading horizon Cabio Biotech Wuhan is expected to generate 1.83 times more return on investment than China Life. However, Cabio Biotech is 1.83 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 0.07 per unit of risk. If you would invest 1,104 in Cabio Biotech Wuhan on November 2, 2024 and sell it today you would earn a total of 901.00 from holding Cabio Biotech Wuhan or generate 81.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cabio Biotech Wuhan vs. China Life Insurance
Performance |
| Timeline |
| Cabio Biotech Wuhan |
| China Life Insurance |
Cabio Biotech and China Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cabio Biotech and China Life
The main advantage of trading using opposite Cabio Biotech and China Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cabio Biotech 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.| Cabio Biotech vs. PetroChina Co Ltd | Cabio Biotech vs. China Railway Construction | Cabio Biotech vs. China Mobile Limited | Cabio Biotech vs. Industrial and Commercial |
| China Life vs. Allmed Medical Products | China Life vs. Financial Street Holdings | China Life vs. Zhonghong Pulin Medical | China Life vs. Peoples Insurance of |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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