Correlation Between Guangdong Jingyi and PetroChina
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By analyzing existing cross correlation between Guangdong Jingyi Metal and PetroChina Co Ltd, you can compare the effects of market volatilities on Guangdong Jingyi 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 Guangdong Jingyi with a short position of PetroChina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Jingyi and PetroChina.
Diversification Opportunities for Guangdong Jingyi and PetroChina
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Guangdong and PetroChina is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Jingyi Metal and PetroChina Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetroChina and Guangdong Jingyi 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 Guangdong Jingyi Metal 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 Guangdong Jingyi i.e., Guangdong Jingyi and PetroChina go up and down completely randomly.
Pair Corralation between Guangdong Jingyi and PetroChina
Assuming the 90 days trading horizon Guangdong Jingyi Metal is expected to under-perform the PetroChina. In addition to that, Guangdong Jingyi is 2.25 times more volatile than PetroChina Co Ltd. It trades about -0.23 of its total potential returns per unit of risk. PetroChina Co Ltd is currently generating about 0.15 per unit of volatility. If you would invest 845.00 in PetroChina Co Ltd on October 17, 2024 and sell it today you would earn a total of 41.00 from holding PetroChina Co Ltd or generate 4.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Jingyi Metal vs. PetroChina Co Ltd
Performance |
| Timeline |
| Guangdong Jingyi Metal |
| PetroChina |
Guangdong Jingyi and PetroChina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Jingyi and PetroChina
The main advantage of trading using opposite Guangdong Jingyi and PetroChina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Jingyi 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 Guangdong Jingyi Metal 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.
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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