Correlation Between Xiamen Kehua and China Petroleum
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By analyzing existing cross correlation between Xiamen Kehua Hengsheng and China Petroleum Chemical, you can compare the effects of market volatilities on Xiamen Kehua 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 Xiamen Kehua with a short position of China Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiamen Kehua and China Petroleum.
Diversification Opportunities for Xiamen Kehua and China Petroleum
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Xiamen and China is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Xiamen Kehua Hengsheng 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 Xiamen Kehua 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 Xiamen Kehua Hengsheng 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 Xiamen Kehua i.e., Xiamen Kehua and China Petroleum go up and down completely randomly.
Pair Corralation between Xiamen Kehua and China Petroleum
Assuming the 90 days trading horizon Xiamen Kehua Hengsheng is expected to generate 2.05 times more return on investment than China Petroleum. However, Xiamen Kehua is 2.05 times more volatile than China Petroleum Chemical. It trades about 0.05 of its potential returns per unit of risk. China Petroleum Chemical is currently generating about 0.05 per unit of risk. If you would invest 2,331 in Xiamen Kehua Hengsheng on October 18, 2024 and sell it today you would earn a total of 708.00 from holding Xiamen Kehua Hengsheng or generate 30.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xiamen Kehua Hengsheng vs. China Petroleum Chemical
Performance |
| Timeline |
| Xiamen Kehua Hengsheng |
| China Petroleum Chemical |
Xiamen Kehua and China Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xiamen Kehua and China Petroleum
The main advantage of trading using opposite Xiamen Kehua and China Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiamen Kehua 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.| Xiamen Kehua vs. China Petroleum Chemical | Xiamen Kehua vs. PetroChina Co Ltd | Xiamen Kehua vs. China State Construction | Xiamen Kehua vs. China Railway Group |
| China Petroleum vs. Pengxin International Mining | China Petroleum vs. Tianjin Silvery Dragon | China Petroleum vs. Zijin Mining Group | China Petroleum vs. Eastroc Beverage Group |
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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