Correlation Between China Asset and CNPC Capital
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By analyzing existing cross correlation between China Asset Management and CNPC Capital Co, you can compare the effects of market volatilities on China Asset and CNPC Capital 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 China Asset with a short position of CNPC Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Asset and CNPC Capital.
Diversification Opportunities for China Asset and CNPC Capital
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between China and CNPC is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding China Asset Management and CNPC Capital Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNPC Capital and China Asset 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 China Asset Management are associated (or correlated) with CNPC Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNPC Capital has no effect on the direction of China Asset i.e., China Asset and CNPC Capital go up and down completely randomly.
Pair Corralation between China Asset and CNPC Capital
Assuming the 90 days trading horizon China Asset is expected to generate 1.01 times less return on investment than CNPC Capital. But when comparing it to its historical volatility, China Asset Management is 3.15 times less risky than CNPC Capital. It trades about 0.09 of its potential returns per unit of risk. CNPC Capital Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 567.00 in CNPC Capital Co on November 20, 2024 and sell it today you would earn a total of 114.00 from holding CNPC Capital Co or generate 20.11% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
China Asset Management vs. CNPC Capital Co
Performance |
Timeline |
China Asset Management |
CNPC Capital |
China Asset and CNPC Capital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with China Asset and CNPC Capital
The main advantage of trading using opposite China Asset and CNPC Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Asset position performs unexpectedly, CNPC Capital 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 CNPC Capital will offset losses from the drop in CNPC Capital's long position.China Asset vs. Huawen Media Investment | ||
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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