Correlation Between China Petroleum and Longxing Chemical
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By analyzing existing cross correlation between China Petroleum Chemical and Longxing Chemical Stock, you can compare the effects of market volatilities on China Petroleum and Longxing Chemical 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 Longxing Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Petroleum and Longxing Chemical.
Diversification Opportunities for China Petroleum and Longxing Chemical
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Longxing is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding China Petroleum Chemical and Longxing Chemical Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Longxing Chemical Stock 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 Longxing Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Longxing Chemical Stock has no effect on the direction of China Petroleum i.e., China Petroleum and Longxing Chemical go up and down completely randomly.
Pair Corralation between China Petroleum and Longxing Chemical
Assuming the 90 days trading horizon China Petroleum is expected to generate 7.02 times less return on investment than Longxing Chemical. But when comparing it to its historical volatility, China Petroleum Chemical is 2.99 times less risky than Longxing Chemical. It trades about 0.12 of its potential returns per unit of risk. Longxing Chemical Stock is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 495.00 in Longxing Chemical Stock on September 3, 2024 and sell it today you would earn a total of 70.00 from holding Longxing Chemical Stock or generate 14.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Petroleum Chemical vs. Longxing Chemical Stock
Performance |
| Timeline |
| China Petroleum Chemical |
| Longxing Chemical Stock |
China Petroleum and Longxing Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Petroleum and Longxing Chemical
The main advantage of trading using opposite China Petroleum and Longxing Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Petroleum position performs unexpectedly, Longxing Chemical 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 Longxing Chemical will offset losses from the drop in Longxing Chemical's long position.| China Petroleum vs. Eastern Air Logistics | China Petroleum vs. Ningbo Fangzheng Automobile | China Petroleum vs. Xinhua Winshare Publishing | China Petroleum vs. Jiangsu Phoenix Publishing |
| Longxing Chemical vs. Guangdong Liantai Environmental | Longxing Chemical vs. Hengli Industrial Development | Longxing Chemical vs. Lingyuan Iron Steel | Longxing Chemical vs. Dongjiang Environmental Co |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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