Correlation Between China Petroleum and Shenzhen INVT
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By analyzing existing cross correlation between China Petroleum Chemical and Shenzhen INVT Electric, you can compare the effects of market volatilities on China Petroleum and Shenzhen INVT 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 Shenzhen INVT. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Petroleum and Shenzhen INVT.
Diversification Opportunities for China Petroleum and Shenzhen INVT
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between China and Shenzhen is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding China Petroleum Chemical and Shenzhen INVT Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen INVT Electric 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 Shenzhen INVT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen INVT Electric has no effect on the direction of China Petroleum i.e., China Petroleum and Shenzhen INVT go up and down completely randomly.
Pair Corralation between China Petroleum and Shenzhen INVT
Assuming the 90 days trading horizon China Petroleum Chemical is expected to under-perform the Shenzhen INVT. But the stock apears to be less risky and, when comparing its historical volatility, China Petroleum Chemical is 3.56 times less risky than Shenzhen INVT. The stock trades about -0.4 of its potential returns per unit of risk. The Shenzhen INVT Electric is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 731.00 in Shenzhen INVT Electric on October 25, 2024 and sell it today you would earn a total of 41.00 from holding Shenzhen INVT Electric or generate 5.61% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 95.45% |
Values | Daily Returns |
China Petroleum Chemical vs. Shenzhen INVT Electric
Performance |
Timeline |
China Petroleum Chemical |
Shenzhen INVT Electric |
China Petroleum and Shenzhen INVT Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with China Petroleum and Shenzhen INVT
The main advantage of trading using opposite China Petroleum and Shenzhen INVT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Petroleum position performs unexpectedly, Shenzhen INVT 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 Shenzhen INVT will offset losses from the drop in Shenzhen INVT's long position.China Petroleum vs. Queclink Wireless Solutions | China Petroleum vs. Masterwork Machinery | China Petroleum vs. Shantui Construction Machinery | China Petroleum vs. State Grid InformationCommunication |
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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