Correlation Between China World and CNOOC
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By analyzing existing cross correlation between China World Trade and CNOOC Limited, you can compare the effects of market volatilities on China World and CNOOC 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 World with a short position of CNOOC. Check out your portfolio center. Please also check ongoing floating volatility patterns of China World and CNOOC.
Diversification Opportunities for China World and CNOOC
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and CNOOC is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding China World Trade and CNOOC Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNOOC Limited and China World 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 World Trade are associated (or correlated) with CNOOC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNOOC Limited has no effect on the direction of China World i.e., China World and CNOOC go up and down completely randomly.
Pair Corralation between China World and CNOOC
Assuming the 90 days trading horizon China World Trade is expected to generate 1.21 times more return on investment than CNOOC. However, China World is 1.21 times more volatile than CNOOC Limited. It trades about -0.04 of its potential returns per unit of risk. CNOOC Limited is currently generating about -0.13 per unit of risk. If you would invest 2,423 in China World Trade on September 13, 2024 and sell it today you would lose (86.00) from holding China World Trade or give up 3.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China World Trade vs. CNOOC Limited
Performance |
| Timeline |
| China World Trade |
| CNOOC Limited |
China World and CNOOC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China World and CNOOC
The main advantage of trading using opposite China World and CNOOC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China World position performs unexpectedly, CNOOC 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 CNOOC will offset losses from the drop in CNOOC's long position.| China World vs. China Life Insurance | China World vs. Cinda Securities Co | China World vs. Piotech Inc A | China World vs. Dongxing Sec Co |
| CNOOC vs. Hang Xiao Steel | CNOOC vs. Dongjiang Environmental Co | CNOOC vs. China World Trade | CNOOC vs. Shandong Iron and |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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