Correlation Between Huaneng Lancang and PetroChina
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By analyzing existing cross correlation between Huaneng Lancang River and PetroChina Co Ltd, you can compare the effects of market volatilities on Huaneng Lancang 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 Huaneng Lancang with a short position of PetroChina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huaneng Lancang and PetroChina.
Diversification Opportunities for Huaneng Lancang and PetroChina
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Huaneng and PetroChina is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Huaneng Lancang River and PetroChina Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetroChina and Huaneng Lancang 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 Huaneng Lancang River 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 Huaneng Lancang i.e., Huaneng Lancang and PetroChina go up and down completely randomly.
Pair Corralation between Huaneng Lancang and PetroChina
Assuming the 90 days trading horizon Huaneng Lancang is expected to generate 1.51 times less return on investment than PetroChina. But when comparing it to its historical volatility, Huaneng Lancang River is 1.54 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 302.00 from holding PetroChina Co Ltd or generate 60.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huaneng Lancang River vs. PetroChina Co Ltd
Performance |
| Timeline |
| Huaneng Lancang River |
| PetroChina |
Huaneng Lancang and PetroChina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huaneng Lancang and PetroChina
The main advantage of trading using opposite Huaneng Lancang and PetroChina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huaneng Lancang 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.| Huaneng Lancang vs. Aofu Environmental Technology | Huaneng Lancang vs. Tongxing Environmental Protection | Huaneng Lancang vs. City Development Environment | Huaneng Lancang vs. Hainan Haiqi Transportation |
| 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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