Correlation Between Semiconductor Manufacturing and China Life
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By analyzing existing cross correlation between Semiconductor Manufacturing Intl and China Life Insurance, you can compare the effects of market volatilities on Semiconductor Manufacturing 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 Semiconductor Manufacturing with a short position of China Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Semiconductor Manufacturing and China Life.
Diversification Opportunities for Semiconductor Manufacturing and China Life
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Semiconductor and China is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Semiconductor Manufacturing In 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 Semiconductor Manufacturing 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 Semiconductor Manufacturing Intl 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 Semiconductor Manufacturing i.e., Semiconductor Manufacturing and China Life go up and down completely randomly.
Pair Corralation between Semiconductor Manufacturing and China Life
Assuming the 90 days trading horizon Semiconductor Manufacturing Intl is expected to under-perform the China Life. In addition to that, Semiconductor Manufacturing is 1.74 times more volatile than China Life Insurance. It trades about -0.12 of its total potential returns per unit of risk. China Life Insurance is currently generating about -0.1 per unit of volatility. If you would invest 4,010 in China Life Insurance on December 8, 2024 and sell it today you would lose (132.00) from holding China Life Insurance or give up 3.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Semiconductor Manufacturing In vs. China Life Insurance
Performance |
| Timeline |
| Semiconductor Manufacturing |
| China Life Insurance |
Semiconductor Manufacturing and China Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Semiconductor Manufacturing and China Life
The main advantage of trading using opposite Semiconductor Manufacturing and China Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Semiconductor Manufacturing 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.The idea behind Semiconductor Manufacturing Intl and China Life Insurance pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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