Correlation Between Guocheng Mining and CNOOC
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By analyzing existing cross correlation between Guocheng Mining Co and CNOOC Limited, you can compare the effects of market volatilities on Guocheng Mining and CNOOC 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 Guocheng Mining with a short position of CNOOC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guocheng Mining and CNOOC.
Diversification Opportunities for Guocheng Mining and CNOOC
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Guocheng and CNOOC is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Guocheng Mining Co and CNOOC Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNOOC Limited and Guocheng Mining 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 Guocheng Mining Co are associated (or correlated) with CNOOC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNOOC Limited has no effect on the direction of Guocheng Mining i.e., Guocheng Mining and CNOOC go up and down completely randomly.
Pair Corralation between Guocheng Mining and CNOOC
Assuming the 90 days trading horizon Guocheng Mining Co is expected to generate 1.83 times more return on investment than CNOOC. However, Guocheng Mining is 1.83 times more volatile than CNOOC Limited. It trades about 0.11 of its potential returns per unit of risk. CNOOC Limited is currently generating about -0.16 per unit of risk. If you would invest 1,139 in Guocheng Mining Co on November 7, 2024 and sell it today you would earn a total of 49.00 from holding Guocheng Mining Co or generate 4.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guocheng Mining Co vs. CNOOC Limited
Performance |
| Timeline |
| Guocheng Mining |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| CNOOC Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Guocheng Mining and CNOOC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guocheng Mining and CNOOC
The main advantage of trading using opposite Guocheng Mining and CNOOC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guocheng Mining position performs unexpectedly, CNOOC 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 CNOOC will offset losses from the drop in CNOOC's long position.The idea behind Guocheng Mining Co and CNOOC Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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