Correlation Between Wangneng Environment and PetroChina
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By analyzing existing cross correlation between Wangneng Environment Co and PetroChina Co Ltd, you can compare the effects of market volatilities on Wangneng Environment 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 Wangneng Environment with a short position of PetroChina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wangneng Environment and PetroChina.
Diversification Opportunities for Wangneng Environment and PetroChina
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Wangneng and PetroChina is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Wangneng Environment Co and PetroChina Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetroChina and Wangneng Environment 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 Wangneng Environment Co 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 Wangneng Environment i.e., Wangneng Environment and PetroChina go up and down completely randomly.
Pair Corralation between Wangneng Environment and PetroChina
Assuming the 90 days trading horizon Wangneng Environment Co is expected to under-perform the PetroChina. But the stock apears to be less risky and, when comparing its historical volatility, Wangneng Environment Co is 1.4 times less risky than PetroChina. The stock trades about -0.01 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 495.00 in PetroChina Co Ltd on September 3, 2024 and sell it today you would earn a total of 309.00 from holding PetroChina Co Ltd or generate 62.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wangneng Environment Co vs. PetroChina Co Ltd
Performance |
| Timeline |
| Wangneng Environment |
| PetroChina |
Wangneng Environment and PetroChina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wangneng Environment and PetroChina
The main advantage of trading using opposite Wangneng Environment and PetroChina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wangneng Environment 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.| Wangneng Environment vs. PetroChina Co Ltd | Wangneng Environment vs. China Mobile Limited | Wangneng Environment vs. Industrial and Commercial | Wangneng Environment vs. China Life Insurance |
| PetroChina vs. China Express Airlines | PetroChina vs. Xinhua Winshare Publishing | PetroChina vs. Jinhui Liquor Co | PetroChina vs. Beijing Kaiwen Education |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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