Correlation Between Focus Home and PetroChina Company
Can any of the company-specific risk be diversified away by investing in both Focus Home and PetroChina Company at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Focus Home and PetroChina Company into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Focus Home Interactive and PetroChina Company Limited, you can compare the effects of market volatilities on Focus Home and PetroChina Company 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 Focus Home with a short position of PetroChina Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of Focus Home and PetroChina Company.
Diversification Opportunities for Focus Home and PetroChina Company
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Focus and PetroChina is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Focus Home Interactive and PetroChina Company Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetroChina Limited and Focus Home 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 Focus Home Interactive are associated (or correlated) with PetroChina Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PetroChina Limited has no effect on the direction of Focus Home i.e., Focus Home and PetroChina Company go up and down completely randomly.
Pair Corralation between Focus Home and PetroChina Company
Assuming the 90 days horizon Focus Home is expected to generate 4.61 times less return on investment than PetroChina Company. In addition to that, Focus Home is 1.37 times more volatile than PetroChina Company Limited. It trades about 0.02 of its total potential returns per unit of risk. PetroChina Company Limited is currently generating about 0.1 per unit of volatility. If you would invest 28.00 in PetroChina Company Limited on September 14, 2024 and sell it today you would earn a total of 43.00 from holding PetroChina Company Limited or generate 153.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Focus Home Interactive vs. PetroChina Company Limited
Performance |
| Timeline |
| Focus Home Interactive |
| PetroChina Limited |
Focus Home and PetroChina Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Focus Home and PetroChina Company
The main advantage of trading using opposite Focus Home and PetroChina Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Focus Home position performs unexpectedly, PetroChina Company 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 Company will offset losses from the drop in PetroChina Company's long position.| Focus Home vs. NEXON Co | Focus Home vs. Take Two Interactive Software | Focus Home vs. Superior Plus Corp | Focus Home vs. SIVERS SEMICONDUCTORS AB |
| PetroChina Company vs. UNIVMUSIC GRPADR050 | PetroChina Company vs. Focus Home Interactive | PetroChina Company vs. Corporate Office Properties | PetroChina Company vs. Compagnie Plastic Omnium |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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