Correlation Between Guangdong Tianhe and China Life
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By analyzing existing cross correlation between Guangdong Tianhe Agricultural and China Life Insurance, you can compare the effects of market volatilities on Guangdong Tianhe 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 Guangdong Tianhe with a short position of China Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Tianhe and China Life.
Diversification Opportunities for Guangdong Tianhe and China Life
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Guangdong and China is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Tianhe Agricultural 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 Guangdong Tianhe 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 Guangdong Tianhe Agricultural 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 Guangdong Tianhe i.e., Guangdong Tianhe and China Life go up and down completely randomly.
Pair Corralation between Guangdong Tianhe and China Life
Assuming the 90 days trading horizon Guangdong Tianhe Agricultural is expected to generate 1.17 times more return on investment than China Life. However, Guangdong Tianhe is 1.17 times more volatile than China Life Insurance. It trades about 0.18 of its potential returns per unit of risk. China Life Insurance is currently generating about 0.09 per unit of risk. If you would invest 510.00 in Guangdong Tianhe Agricultural on September 23, 2024 and sell it today you would earn a total of 230.00 from holding Guangdong Tianhe Agricultural or generate 45.1% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Guangdong Tianhe Agricultural vs. China Life Insurance
Performance |
Timeline |
Guangdong Tianhe Agr |
China Life Insurance |
Guangdong Tianhe and China Life Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Guangdong Tianhe and China Life
The main advantage of trading using opposite Guangdong Tianhe and China Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Tianhe 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.Guangdong Tianhe vs. Zijin Mining Group | Guangdong Tianhe vs. Wanhua Chemical Group | Guangdong Tianhe vs. Baoshan Iron Steel | Guangdong Tianhe vs. Shandong Gold Mining |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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