Correlation Between China Petroleum and GuoChuang Software
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By analyzing existing cross correlation between China Petroleum Chemical and GuoChuang Software Co, you can compare the effects of market volatilities on China Petroleum and GuoChuang Software 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 GuoChuang Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Petroleum and GuoChuang Software.
Diversification Opportunities for China Petroleum and GuoChuang Software
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between China and GuoChuang is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding China Petroleum Chemical and GuoChuang Software Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GuoChuang Software 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 GuoChuang Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GuoChuang Software has no effect on the direction of China Petroleum i.e., China Petroleum and GuoChuang Software go up and down completely randomly.
Pair Corralation between China Petroleum and GuoChuang Software
Assuming the 90 days trading horizon China Petroleum is expected to generate 2.15 times less return on investment than GuoChuang Software. But when comparing it to its historical volatility, China Petroleum Chemical is 2.78 times less risky than GuoChuang Software. It trades about 0.04 of its potential returns per unit of risk. GuoChuang Software Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,360 in GuoChuang Software Co on September 3, 2024 and sell it today you would earn a total of 314.00 from holding GuoChuang Software Co or generate 13.31% 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. GuoChuang Software Co
Performance |
| Timeline |
| China Petroleum Chemical |
| GuoChuang Software |
China Petroleum and GuoChuang Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Petroleum and GuoChuang Software
The main advantage of trading using opposite China Petroleum and GuoChuang Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Petroleum position performs unexpectedly, GuoChuang Software 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 GuoChuang Software will offset losses from the drop in GuoChuang Software'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 |
| GuoChuang Software vs. Agricultural Bank of | GuoChuang Software vs. China Construction Bank | GuoChuang Software vs. Postal Savings Bank | GuoChuang Software vs. Bank of Communications |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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