Correlation Between UNIVMUSIC GRPADR050 and PetroChina Company
Can any of the company-specific risk be diversified away by investing in both UNIVMUSIC GRPADR050 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 UNIVMUSIC GRPADR050 and PetroChina Company into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UNIVMUSIC GRPADR050 and PetroChina Company Limited, you can compare the effects of market volatilities on UNIVMUSIC GRPADR050 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 UNIVMUSIC GRPADR050 with a short position of PetroChina Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNIVMUSIC GRPADR050 and PetroChina Company.
Diversification Opportunities for UNIVMUSIC GRPADR050 and PetroChina Company
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between UNIVMUSIC and PetroChina is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding UNIVMUSIC GRPADR050 and PetroChina Company Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetroChina Limited and UNIVMUSIC GRPADR050 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 UNIVMUSIC GRPADR050 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 UNIVMUSIC GRPADR050 i.e., UNIVMUSIC GRPADR050 and PetroChina Company go up and down completely randomly.
Pair Corralation between UNIVMUSIC GRPADR050 and PetroChina Company
Assuming the 90 days trading horizon UNIVMUSIC GRPADR050 is expected to generate 1.0 times less return on investment than PetroChina Company. But when comparing it to its historical volatility, UNIVMUSIC GRPADR050 is 1.73 times less risky than PetroChina Company. It trades about 0.24 of its potential returns per unit of risk. PetroChina Company Limited is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 67.00 in PetroChina Company Limited on September 14, 2024 and sell it today you would earn a total of 4.00 from holding PetroChina Company Limited or generate 5.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
UNIVMUSIC GRPADR050 vs. PetroChina Company Limited
Performance |
| Timeline |
| UNIVMUSIC GRPADR050 |
| PetroChina Limited |
UNIVMUSIC GRPADR050 and PetroChina Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNIVMUSIC GRPADR050 and PetroChina Company
The main advantage of trading using opposite UNIVMUSIC GRPADR050 and PetroChina Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNIVMUSIC GRPADR050 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.| UNIVMUSIC GRPADR050 vs. HYDROFARM HLD GRP | UNIVMUSIC GRPADR050 vs. ORMAT TECHNOLOGIES | UNIVMUSIC GRPADR050 vs. Dairy Farm International | UNIVMUSIC GRPADR050 vs. AAC TECHNOLOGHLDGADR |
| 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |