Correlation Between Shandong Mining and PetroChina
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By analyzing existing cross correlation between Shandong Mining Machinery and PetroChina Co Ltd, you can compare the effects of market volatilities on Shandong Mining 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 Shandong Mining with a short position of PetroChina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Mining and PetroChina.
Diversification Opportunities for Shandong Mining and PetroChina
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Shandong and PetroChina is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Mining Machinery and PetroChina Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetroChina and Shandong Mining 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 Shandong Mining Machinery 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 Shandong Mining i.e., Shandong Mining and PetroChina go up and down completely randomly.
Pair Corralation between Shandong Mining and PetroChina
Assuming the 90 days trading horizon Shandong Mining Machinery is expected to generate 5.77 times more return on investment than PetroChina. However, Shandong Mining is 5.77 times more volatile than PetroChina Co Ltd. It trades about 0.4 of its potential returns per unit of risk. PetroChina Co Ltd is currently generating about 0.22 per unit of risk. If you would invest 294.00 in Shandong Mining Machinery on September 13, 2024 and sell it today you would earn a total of 214.00 from holding Shandong Mining Machinery or generate 72.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Mining Machinery vs. PetroChina Co Ltd
Performance |
| Timeline |
| Shandong Mining Machinery |
| PetroChina |
Shandong Mining and PetroChina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Mining and PetroChina
The main advantage of trading using opposite Shandong Mining and PetroChina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Mining 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.| Shandong Mining vs. China Petroleum Chemical | Shandong Mining vs. PetroChina Co Ltd | Shandong Mining vs. China State Construction | Shandong Mining vs. China Railway Group |
| PetroChina vs. Ningxia Building Materials | PetroChina vs. Chongqing Sulian Plastic | PetroChina vs. Guangzhou Tinci Materials | PetroChina vs. Tianjin Pengling Rubber |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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