Correlation Between Maoming Petro and China State
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By analyzing existing cross correlation between Maoming Petro Chemical Shihua and China State Construction, you can compare the effects of market volatilities on Maoming Petro and China State 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 Maoming Petro with a short position of China State. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maoming Petro and China State.
Diversification Opportunities for Maoming Petro and China State
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Maoming and China is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Maoming Petro Chemical Shihua and China State Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China State Construction and Maoming Petro 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 Maoming Petro Chemical Shihua are associated (or correlated) with China State. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China State Construction has no effect on the direction of Maoming Petro i.e., Maoming Petro and China State go up and down completely randomly.
Pair Corralation between Maoming Petro and China State
Assuming the 90 days trading horizon Maoming Petro Chemical Shihua is expected to generate 0.97 times more return on investment than China State. However, Maoming Petro Chemical Shihua is 1.04 times less risky than China State. It trades about 0.02 of its potential returns per unit of risk. China State Construction is currently generating about -0.11 per unit of risk. If you would invest 363.00 in Maoming Petro Chemical Shihua on November 27, 2024 and sell it today you would earn a total of 1.00 from holding Maoming Petro Chemical Shihua or generate 0.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maoming Petro Chemical Shihua vs. China State Construction
Performance |
| Timeline |
| Maoming Petro Chemical |
| China State Construction |
Maoming Petro and China State Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maoming Petro and China State
The main advantage of trading using opposite Maoming Petro and China State positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maoming Petro position performs unexpectedly, China State 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 State will offset losses from the drop in China State's long position.| Maoming Petro vs. Hainan Airlines Co | Maoming Petro vs. Heren Health Co | Maoming Petro vs. Dezhan HealthCare Co | Maoming Petro vs. Anhui Gujing Distillery |
| China State vs. TianJin 712 Communication | China State vs. INKON Life Technology | China State vs. Juneyao Airlines | China State vs. Elec Tech International 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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