Correlation Between GREENX METALS and China Petroleum
Can any of the company-specific risk be diversified away by investing in both GREENX METALS and China Petroleum 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 GREENX METALS and China Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GREENX METALS LTD and China Petroleum Chemical, you can compare the effects of market volatilities on GREENX METALS 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 GREENX METALS with a short position of China Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of GREENX METALS and China Petroleum.
Diversification Opportunities for GREENX METALS and China Petroleum
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GREENX and China is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding GREENX METALS LTD 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 GREENX METALS 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 GREENX METALS LTD 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 GREENX METALS i.e., GREENX METALS and China Petroleum go up and down completely randomly.
Pair Corralation between GREENX METALS and China Petroleum
Assuming the 90 days trading horizon GREENX METALS LTD is expected to under-perform the China Petroleum. In addition to that, GREENX METALS is 1.56 times more volatile than China Petroleum Chemical. It trades about -0.21 of its total potential returns per unit of risk. China Petroleum Chemical is currently generating about -0.07 per unit of volatility. If you would invest 52.00 in China Petroleum Chemical on September 4, 2024 and sell it today you would lose (2.00) from holding China Petroleum Chemical or give up 3.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
GREENX METALS LTD vs. China Petroleum Chemical
Performance |
| Timeline |
| GREENX METALS LTD |
| China Petroleum Chemical |
GREENX METALS and China Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GREENX METALS and China Petroleum
The main advantage of trading using opposite GREENX METALS and China Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GREENX METALS 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.| GREENX METALS vs. PICKN PAY STORES | GREENX METALS vs. HK Electric Investments | GREENX METALS vs. RETAIL FOOD GROUP | GREENX METALS vs. Zijin Mining Group |
| China Petroleum vs. Kaiser Aluminum | China Petroleum vs. NURAN WIRELESS INC | China Petroleum vs. CarsalesCom | China Petroleum vs. Tower One Wireless |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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