Correlation Between Shenzhen and China Petroleum
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By analyzing existing cross correlation between Shenzhen AV Display Co and China Petroleum Chemical, you can compare the effects of market volatilities on Shenzhen 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 Shenzhen with a short position of China Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen and China Petroleum.
Diversification Opportunities for Shenzhen and China Petroleum
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Shenzhen and China is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen AV Display Co 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 Shenzhen 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 Shenzhen AV Display Co 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 Shenzhen i.e., Shenzhen and China Petroleum go up and down completely randomly.
Pair Corralation between Shenzhen and China Petroleum
Assuming the 90 days trading horizon Shenzhen is expected to generate 1.51 times less return on investment than China Petroleum. In addition to that, Shenzhen is 2.18 times more volatile than China Petroleum Chemical. It trades about 0.02 of its total potential returns per unit of risk. China Petroleum Chemical is currently generating about 0.05 per unit of volatility. If you would invest 438.00 in China Petroleum Chemical on October 13, 2024 and sell it today you would earn a total of 191.00 from holding China Petroleum Chemical or generate 43.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen AV Display Co vs. China Petroleum Chemical
Performance |
| Timeline |
| Shenzhen AV Display |
| China Petroleum Chemical |
Shenzhen and China Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen and China Petroleum
The main advantage of trading using opposite Shenzhen and China Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen 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.| Shenzhen vs. Guangdong Marubi Biotechnology | Shenzhen vs. Anhui Huaheng Biotechnology | Shenzhen vs. Yili Chuanning Biotechnology | Shenzhen vs. Shenzhen Bioeasy Biotechnology |
| China Petroleum vs. Nanjing Putian Telecommunications | China Petroleum vs. Eastroc Beverage Group | China Petroleum vs. Qingdao Foods Co | China Petroleum vs. Fiberhome Telecommunication Technologies |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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