Correlation Between China Longyuan and PetroChina
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By analyzing existing cross correlation between China Longyuan Power and PetroChina Co Ltd, you can compare the effects of market volatilities on China Longyuan and PetroChina 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 China Longyuan with a short position of PetroChina. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Longyuan and PetroChina.
Diversification Opportunities for China Longyuan and PetroChina
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between China and PetroChina is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding China Longyuan Power and PetroChina Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetroChina and China Longyuan 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 China Longyuan Power are associated (or correlated) with PetroChina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PetroChina has no effect on the direction of China Longyuan i.e., China Longyuan and PetroChina go up and down completely randomly.
Pair Corralation between China Longyuan and PetroChina
Assuming the 90 days trading horizon China Longyuan Power is expected to under-perform the PetroChina. But the stock apears to be less risky and, when comparing its historical volatility, China Longyuan Power is 1.05 times less risky than PetroChina. The stock trades about 0.0 of its potential returns per unit of risk. The PetroChina Co Ltd is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 500.00 in PetroChina Co Ltd on August 29, 2024 and sell it today you would earn a total of 302.00 from holding PetroChina Co Ltd or generate 60.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Longyuan Power vs. PetroChina Co Ltd
Performance |
| Timeline |
| China Longyuan Power |
| PetroChina |
China Longyuan and PetroChina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Longyuan and PetroChina
The main advantage of trading using opposite China Longyuan and PetroChina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Longyuan position performs unexpectedly, PetroChina 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 PetroChina will offset losses from the drop in PetroChina's long position.| China Longyuan vs. Industrial and Commercial | China Longyuan vs. Agricultural Bank of | China Longyuan vs. China Construction Bank | China Longyuan vs. Bank of China |
| PetroChina vs. Guilin Seamild Foods | PetroChina vs. Great Sun Foods Co | PetroChina vs. Jiahe Foods Industry | PetroChina vs. Lander Sports Development |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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