Correlation Between Tongxing Environmental and China Petroleum
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By analyzing existing cross correlation between Tongxing Environmental Protection and China Petroleum Chemical, you can compare the effects of market volatilities on Tongxing Environmental 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 Tongxing Environmental with a short position of China Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tongxing Environmental and China Petroleum.
Diversification Opportunities for Tongxing Environmental and China Petroleum
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tongxing and China is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Tongxing Environmental Protect 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 Tongxing Environmental 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 Tongxing Environmental Protection 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 Tongxing Environmental i.e., Tongxing Environmental and China Petroleum go up and down completely randomly.
Pair Corralation between Tongxing Environmental and China Petroleum
Assuming the 90 days trading horizon Tongxing Environmental Protection is expected to generate 1.76 times more return on investment than China Petroleum. However, Tongxing Environmental is 1.76 times more volatile than China Petroleum Chemical. It trades about 0.02 of its potential returns per unit of risk. China Petroleum Chemical is currently generating about 0.01 per unit of risk. If you would invest 1,653 in Tongxing Environmental Protection on August 25, 2024 and sell it today you would earn a total of 18.00 from holding Tongxing Environmental Protection or generate 1.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tongxing Environmental Protect vs. China Petroleum Chemical
Performance |
| Timeline |
| Tongxing Environmental |
| China Petroleum Chemical |
Tongxing Environmental and China Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tongxing Environmental and China Petroleum
The main advantage of trading using opposite Tongxing Environmental and China Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tongxing Environmental 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.| Tongxing Environmental vs. China Petroleum Chemical | Tongxing Environmental vs. PetroChina Co Ltd | Tongxing Environmental vs. China State Construction | Tongxing Environmental vs. China Railway Group |
| China Petroleum vs. Nantong Haixing Electronics | China Petroleum vs. CITIC Metal Co | China Petroleum vs. Guangzhou Dongfang Hotel | China Petroleum vs. Unigroup Guoxin Microelectronics |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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