Correlation Between CNPC Capital and China World
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By analyzing existing cross correlation between CNPC Capital Co and China World Trade, you can compare the effects of market volatilities on CNPC Capital and China World 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 CNPC Capital with a short position of China World. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNPC Capital and China World.
Diversification Opportunities for CNPC Capital and China World
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CNPC and China is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding CNPC Capital Co and China World Trade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China World Trade and CNPC Capital 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 CNPC Capital Co are associated (or correlated) with China World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China World Trade has no effect on the direction of CNPC Capital i.e., CNPC Capital and China World go up and down completely randomly.
Pair Corralation between CNPC Capital and China World
Assuming the 90 days trading horizon CNPC Capital Co is expected to under-perform the China World. In addition to that, CNPC Capital is 1.43 times more volatile than China World Trade. It trades about -0.18 of its total potential returns per unit of risk. China World Trade is currently generating about -0.06 per unit of volatility. If you would invest 2,431 in China World Trade on October 17, 2024 and sell it today you would lose (42.00) from holding China World Trade or give up 1.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CNPC Capital Co vs. China World Trade
Performance |
| Timeline |
| CNPC Capital |
| China World Trade |
CNPC Capital and China World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNPC Capital and China World
The main advantage of trading using opposite CNPC Capital and China World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNPC Capital position performs unexpectedly, China World 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 World will offset losses from the drop in China World's long position.| CNPC Capital vs. China World Trade | CNPC Capital vs. Changjiang Publishing Media | CNPC Capital vs. Heilongjiang Publishing Media | CNPC Capital vs. Omnijoi Media Corp |
| China World vs. Ningbo Fangzheng Automobile | China World vs. Guangdong Wens Foodstuff | China World vs. Eastroc Beverage Group | China World vs. Anhui Jianghuai Automobile |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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