Correlation Between China Asset and CNPC Capital

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both China Asset and CNPC Capital 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 China Asset and CNPC Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
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

ChinaCNPCDiversified AwayChinaCNPCDiversified Away100%
-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 Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

China Asset Management  vs.  CNPC Capital Co

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -20-100102030
JavaScript chart by amCharts 3.21.15508068 000617
       Timeline  
China Asset Management 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in China Asset Management are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, China Asset sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb3.23.43.63.844.2
CNPC Capital 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days CNPC Capital Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb6.577.588.5

China Asset and CNPC Capital Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.79-2.84-1.88-0.930.01.072.173.274.375.48 0.050.100.150.20
JavaScript chart by amCharts 3.21.15508068 000617
       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.
The idea behind China Asset Management and CNPC Capital Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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.

Other Complementary Tools

Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
ETF Categories
List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments
Portfolio Analyzer
Portfolio analysis module that provides access to portfolio diagnostics and optimization engine
Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets