Correlation Between Eastern Communications and China Life
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By analyzing existing cross correlation between Eastern Communications Co and China Life Insurance, you can compare the effects of market volatilities on Eastern Communications 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 Eastern Communications with a short position of China Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Communications and China Life.
Diversification Opportunities for Eastern Communications and China Life
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eastern and China is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Communications Co 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 Eastern Communications 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 Eastern Communications Co 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 Eastern Communications i.e., Eastern Communications and China Life go up and down completely randomly.
Pair Corralation between Eastern Communications and China Life
Assuming the 90 days trading horizon Eastern Communications Co is expected to generate 1.14 times more return on investment than China Life. However, Eastern Communications is 1.14 times more volatile than China Life Insurance. It trades about -0.09 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 42.00 in Eastern Communications Co on October 30, 2024 and sell it today you would lose (2.00) from holding Eastern Communications Co or give up 4.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastern Communications Co vs. China Life Insurance
Performance |
| Timeline |
| Eastern Communications |
| China Life Insurance |
Eastern Communications and China Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern Communications and China Life
The main advantage of trading using opposite Eastern Communications and China Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Communications 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.| Eastern Communications vs. Bus Online Co | Eastern Communications vs. Holitech Technology Co | Eastern Communications vs. Gome Telecom Equipment | Eastern Communications vs. Cultural Investment Holdings |
| China Life vs. BizConf Telecom Co | China Life vs. Shenzhen Zhongzhuang Construction | China Life vs. Agricultural Bank of | China Life vs. Wintao Communications Co |
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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