Correlation Between Shanghai Pudong and PetroChina
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By analyzing existing cross correlation between Shanghai Pudong Development and PetroChina Co Ltd, you can compare the effects of market volatilities on Shanghai Pudong 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 Shanghai Pudong with a short position of PetroChina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Pudong and PetroChina.
Diversification Opportunities for Shanghai Pudong and PetroChina
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Shanghai and PetroChina is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Pudong Development and PetroChina Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetroChina and Shanghai Pudong 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 Shanghai Pudong Development 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 Shanghai Pudong i.e., Shanghai Pudong and PetroChina go up and down completely randomly.
Pair Corralation between Shanghai Pudong and PetroChina
Assuming the 90 days trading horizon Shanghai Pudong is expected to generate 1.77 times less return on investment than PetroChina. But when comparing it to its historical volatility, Shanghai Pudong Development is 1.75 times less risky than PetroChina. It trades about 0.06 of its potential returns per unit of risk. PetroChina Co Ltd is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 500.00 in PetroChina Co Ltd on August 29, 2024 and sell it today you would earn a total of 303.00 from holding PetroChina Co Ltd or generate 60.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Pudong Development vs. PetroChina Co Ltd
Performance |
| Timeline |
| Shanghai Pudong Deve |
| PetroChina |
Shanghai Pudong and PetroChina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Pudong and PetroChina
The main advantage of trading using opposite Shanghai Pudong and PetroChina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Pudong 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.| Shanghai Pudong vs. Hang Xiao Steel | Shanghai Pudong vs. Gansu Jiu Steel | Shanghai Pudong vs. Tianjin Capital Environmental | Shanghai Pudong vs. Eit Environmental Development |
| PetroChina vs. Guilin Seamild Foods | PetroChina vs. Great Sun Foods Co | PetroChina vs. Jiahe Foods Industry | PetroChina vs. Lander Sports Development |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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