Correlation Between Shenwu Energy and China Petroleum
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By analyzing existing cross correlation between Shenwu Energy Saving and China Petroleum Chemical, you can compare the effects of market volatilities on Shenwu Energy and China Petroleum 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 Shenwu Energy with a short position of China Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenwu Energy and China Petroleum.
Diversification Opportunities for Shenwu Energy and China Petroleum
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shenwu and China is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Shenwu Energy Saving and China Petroleum Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Petroleum Chemical and Shenwu Energy 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 Shenwu Energy Saving are associated (or correlated) with China Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Petroleum Chemical has no effect on the direction of Shenwu Energy i.e., Shenwu Energy and China Petroleum go up and down completely randomly.
Pair Corralation between Shenwu Energy and China Petroleum
Assuming the 90 days trading horizon Shenwu Energy Saving is expected to generate 2.51 times more return on investment than China Petroleum. However, Shenwu Energy is 2.51 times more volatile than China Petroleum Chemical. It trades about 0.02 of its potential returns per unit of risk. China Petroleum Chemical is currently generating about 0.04 per unit of risk. If you would invest 369.00 in Shenwu Energy Saving on August 25, 2024 and sell it today you would earn a total of 1.00 from holding Shenwu Energy Saving or generate 0.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenwu Energy Saving vs. China Petroleum Chemical
Performance |
| Timeline |
| Shenwu Energy Saving |
| China Petroleum Chemical |
Shenwu Energy and China Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenwu Energy and China Petroleum
The main advantage of trading using opposite Shenwu Energy and China Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenwu Energy position performs unexpectedly, China Petroleum 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 Petroleum will offset losses from the drop in China Petroleum's long position.| Shenwu Energy vs. China Petroleum Chemical | Shenwu Energy vs. PetroChina Co Ltd | Shenwu Energy vs. China State Construction | Shenwu Energy vs. China Railway Group |
| China Petroleum vs. Nantong Haixing Electronics | China Petroleum vs. CITIC Metal Co | China Petroleum vs. Guangzhou Dongfang Hotel | China Petroleum vs. Unigroup Guoxin Microelectronics |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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