Correlation Between Zoje Resources and PetroChina
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By analyzing existing cross correlation between Zoje Resources Investment and PetroChina Co Ltd, you can compare the effects of market volatilities on Zoje Resources 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 Zoje Resources with a short position of PetroChina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zoje Resources and PetroChina.
Diversification Opportunities for Zoje Resources and PetroChina
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Zoje and PetroChina is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Zoje Resources Investment and PetroChina Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetroChina and Zoje Resources 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 Zoje Resources Investment 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 Zoje Resources i.e., Zoje Resources and PetroChina go up and down completely randomly.
Pair Corralation between Zoje Resources and PetroChina
Assuming the 90 days trading horizon Zoje Resources Investment is expected to generate 1.77 times more return on investment than PetroChina. However, Zoje Resources is 1.77 times more volatile than PetroChina Co Ltd. It trades about -0.1 of its potential returns per unit of risk. PetroChina Co Ltd is currently generating about -0.26 per unit of risk. If you would invest 259.00 in Zoje Resources Investment on November 8, 2024 and sell it today you would lose (14.00) from holding Zoje Resources Investment or give up 5.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zoje Resources Investment vs. PetroChina Co Ltd
Performance |
| Timeline |
| Zoje Resources Investment |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| PetroChina |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Zoje Resources and PetroChina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zoje Resources and PetroChina
The main advantage of trading using opposite Zoje Resources and PetroChina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zoje Resources 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.The idea behind Zoje Resources Investment and PetroChina Co Ltd 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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