Correlation Between Hubeiyichang Transportation and PetroChina
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By analyzing existing cross correlation between Hubeiyichang Transportation Group and PetroChina Co Ltd, you can compare the effects of market volatilities on Hubeiyichang Transportation 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 Hubeiyichang Transportation with a short position of PetroChina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubeiyichang Transportation and PetroChina.
Diversification Opportunities for Hubeiyichang Transportation and PetroChina
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hubeiyichang and PetroChina is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Hubeiyichang Transportation Gr and PetroChina Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetroChina and Hubeiyichang Transportation 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 Hubeiyichang Transportation Group 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 Hubeiyichang Transportation i.e., Hubeiyichang Transportation and PetroChina go up and down completely randomly.
Pair Corralation between Hubeiyichang Transportation and PetroChina
Assuming the 90 days trading horizon Hubeiyichang Transportation Group is expected to under-perform the PetroChina. But the stock apears to be less risky and, when comparing its historical volatility, Hubeiyichang Transportation Group is 1.19 times less risky than PetroChina. The stock trades about 0.0 of its potential returns per unit of risk. The PetroChina Co Ltd is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 506.00 in PetroChina Co Ltd on October 16, 2024 and sell it today you would earn a total of 381.00 from holding PetroChina Co Ltd or generate 75.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hubeiyichang Transportation Gr vs. PetroChina Co Ltd
Performance |
| Timeline |
| Hubeiyichang Transportation |
| PetroChina |
Hubeiyichang Transportation and PetroChina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubeiyichang Transportation and PetroChina
The main advantage of trading using opposite Hubeiyichang Transportation and PetroChina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubeiyichang Transportation 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 Hubeiyichang Transportation Group 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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