Correlation Between Shandong Ruifeng and PetroChina
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By analyzing existing cross correlation between Shandong Ruifeng Chemical and PetroChina Co Ltd, you can compare the effects of market volatilities on Shandong Ruifeng 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 Shandong Ruifeng with a short position of PetroChina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Ruifeng and PetroChina.
Diversification Opportunities for Shandong Ruifeng and PetroChina
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shandong and PetroChina is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Ruifeng Chemical and PetroChina Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetroChina and Shandong Ruifeng 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 Shandong Ruifeng Chemical 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 Shandong Ruifeng i.e., Shandong Ruifeng and PetroChina go up and down completely randomly.
Pair Corralation between Shandong Ruifeng and PetroChina
Assuming the 90 days trading horizon Shandong Ruifeng Chemical is expected to generate 1.04 times more return on investment than PetroChina. However, Shandong Ruifeng is 1.04 times more volatile than PetroChina Co Ltd. It trades about 0.1 of its potential returns per unit of risk. PetroChina Co Ltd is currently generating about -0.21 per unit of risk. If you would invest 897.00 in Shandong Ruifeng Chemical on November 4, 2024 and sell it today you would earn a total of 24.00 from holding Shandong Ruifeng Chemical or generate 2.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Ruifeng Chemical vs. PetroChina Co Ltd
Performance |
| Timeline |
| Shandong Ruifeng Chemical |
| PetroChina |
Shandong Ruifeng and PetroChina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Ruifeng and PetroChina
The main advantage of trading using opposite Shandong Ruifeng and PetroChina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Ruifeng 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.| Shandong Ruifeng vs. Zijin Mining Group | Shandong Ruifeng vs. Wanhua Chemical Group | Shandong Ruifeng vs. Baoshan Iron Steel | Shandong Ruifeng vs. Shandong Gold Mining |
| PetroChina vs. Anhui Deli Household | PetroChina vs. Liaoning Chengda Biotechnology | PetroChina vs. Beijing Baolande Software | PetroChina vs. Anhui Huaheng Biotechnology |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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