Correlation Between American Equity and China Life
Can any of the company-specific risk be diversified away by investing in both American Equity and China Life at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining American Equity and China Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Equity Investment and China Life Insurance, you can compare the effects of market volatilities on American Equity 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 American Equity with a short position of China Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Equity and China Life.
Diversification Opportunities for American Equity and China Life
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between American and China is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding American Equity Investment 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 American Equity 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 American Equity Investment 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 American Equity i.e., American Equity and China Life go up and down completely randomly.
Pair Corralation between American Equity and China Life
If you would invest 5,375 in American Equity Investment on August 31, 2024 and sell it today you would earn a total of 0.00 from holding American Equity Investment or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 4.55% |
Values | Daily Returns |
American Equity Investment vs. China Life Insurance
Performance |
Timeline |
American Equity Inve |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
China Life Insurance |
American Equity and China Life Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with American Equity and China Life
The main advantage of trading using opposite American Equity and China Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Equity 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.American Equity vs. MetLife Preferred Stock | American Equity vs. Prudential Public Limited | American Equity vs. MetLife Preferred Stock | American Equity vs. Jackson Financial |
China Life vs. CNO Financial Group | China Life vs. Ping An Insurance | China Life vs. Lincoln National | China Life vs. AIA Group Ltd |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |