Correlation Between China Petroleum and Zhengzhou Qianweiyangchu
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By analyzing existing cross correlation between China Petroleum Chemical and Zhengzhou Qianweiyangchu Food, you can compare the effects of market volatilities on China Petroleum and Zhengzhou Qianweiyangchu 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 Petroleum with a short position of Zhengzhou Qianweiyangchu. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Petroleum and Zhengzhou Qianweiyangchu.
Diversification Opportunities for China Petroleum and Zhengzhou Qianweiyangchu
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Zhengzhou is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding China Petroleum Chemical and Zhengzhou Qianweiyangchu Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhengzhou Qianweiyangchu and China Petroleum 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 Petroleum Chemical are associated (or correlated) with Zhengzhou Qianweiyangchu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhengzhou Qianweiyangchu has no effect on the direction of China Petroleum i.e., China Petroleum and Zhengzhou Qianweiyangchu go up and down completely randomly.
Pair Corralation between China Petroleum and Zhengzhou Qianweiyangchu
Assuming the 90 days trading horizon China Petroleum Chemical is expected to under-perform the Zhengzhou Qianweiyangchu. But the stock apears to be less risky and, when comparing its historical volatility, China Petroleum Chemical is 2.11 times less risky than Zhengzhou Qianweiyangchu. The stock trades about -0.06 of its potential returns per unit of risk. The Zhengzhou Qianweiyangchu Food is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 2,393 in Zhengzhou Qianweiyangchu Food on August 29, 2024 and sell it today you would earn a total of 955.00 from holding Zhengzhou Qianweiyangchu Food or generate 39.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Petroleum Chemical vs. Zhengzhou Qianweiyangchu Food
Performance |
| Timeline |
| China Petroleum Chemical |
| Zhengzhou Qianweiyangchu |
China Petroleum and Zhengzhou Qianweiyangchu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Petroleum and Zhengzhou Qianweiyangchu
The main advantage of trading using opposite China Petroleum and Zhengzhou Qianweiyangchu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Petroleum position performs unexpectedly, Zhengzhou Qianweiyangchu 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 Zhengzhou Qianweiyangchu will offset losses from the drop in Zhengzhou Qianweiyangchu's long position.| China Petroleum vs. Anhui Huilong Agricultural | China Petroleum vs. Chinese Universe Publishing | China Petroleum vs. Shanghai Action Education | China Petroleum vs. Time Publishing 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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