Correlation Between Prosafe SE and PetroChina Company
Can any of the company-specific risk be diversified away by investing in both Prosafe SE 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 Prosafe SE and PetroChina Company into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prosafe SE and PetroChina Company Limited, you can compare the effects of market volatilities on Prosafe SE 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 Prosafe SE with a short position of PetroChina Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prosafe SE and PetroChina Company.
Diversification Opportunities for Prosafe SE and PetroChina Company
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Prosafe and PetroChina is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Prosafe SE and PetroChina Company Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetroChina Limited and Prosafe SE 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 Prosafe SE 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 Prosafe SE i.e., Prosafe SE and PetroChina Company go up and down completely randomly.
Pair Corralation between Prosafe SE and PetroChina Company
Assuming the 90 days horizon Prosafe SE is expected to under-perform the PetroChina Company. In addition to that, Prosafe SE is 4.34 times more volatile than PetroChina Company Limited. It trades about -0.58 of its total potential returns per unit of risk. PetroChina Company Limited is currently generating about -0.07 per unit of volatility. If you would invest 69.00 in PetroChina Company Limited on August 30, 2024 and sell it today you would lose (2.00) from holding PetroChina Company Limited or give up 2.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prosafe SE vs. PetroChina Company Limited
Performance |
| Timeline |
| Prosafe SE |
| PetroChina Limited |
Prosafe SE and PetroChina Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prosafe SE and PetroChina Company
The main advantage of trading using opposite Prosafe SE and PetroChina Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prosafe SE 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.| Prosafe SE vs. MSAD INSURANCE | Prosafe SE vs. Safety Insurance Group | Prosafe SE vs. Zurich Insurance Group | Prosafe SE vs. LIFENET INSURANCE CO |
| PetroChina Company vs. Diamyd Medical AB | PetroChina Company vs. Motorcar Parts of | PetroChina Company vs. HK Electric Investments | PetroChina Company vs. CompuGroup Medical SE |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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