Correlation Between Qingdao Foods and China Petroleum
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By analyzing existing cross correlation between Qingdao Foods Co and China Petroleum Chemical, you can compare the effects of market volatilities on Qingdao Foods 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 Qingdao Foods with a short position of China Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qingdao Foods and China Petroleum.
Diversification Opportunities for Qingdao Foods and China Petroleum
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Qingdao and China is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Qingdao Foods Co 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 Qingdao Foods 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 Qingdao Foods Co 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 Qingdao Foods i.e., Qingdao Foods and China Petroleum go up and down completely randomly.
Pair Corralation between Qingdao Foods and China Petroleum
Assuming the 90 days trading horizon Qingdao Foods Co is expected to generate 2.97 times more return on investment than China Petroleum. However, Qingdao Foods is 2.97 times more volatile than China Petroleum Chemical. It trades about 0.18 of its potential returns per unit of risk. China Petroleum Chemical is currently generating about 0.23 per unit of risk. If you would invest 1,459 in Qingdao Foods Co on September 13, 2024 and sell it today you would earn a total of 136.00 from holding Qingdao Foods Co or generate 9.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qingdao Foods Co vs. China Petroleum Chemical
Performance |
| Timeline |
| Qingdao Foods |
| China Petroleum Chemical |
Qingdao Foods and China Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qingdao Foods and China Petroleum
The main advantage of trading using opposite Qingdao Foods and China Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qingdao Foods 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.| Qingdao Foods vs. Zhejiang Xiantong RubberPlastic | Qingdao Foods vs. King Strong New Material | Qingdao Foods vs. Cangzhou Mingzhu Plastic | Qingdao Foods vs. Tonghua Grape Wine |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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