Correlation Between China Petroleum and Dongnan Electronics
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By analyzing existing cross correlation between China Petroleum Chemical and Dongnan Electronics Co, you can compare the effects of market volatilities on China Petroleum and Dongnan Electronics 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 Dongnan Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Petroleum and Dongnan Electronics.
Diversification Opportunities for China Petroleum and Dongnan Electronics
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Dongnan is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding China Petroleum Chemical and Dongnan Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongnan Electronics 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 Dongnan Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongnan Electronics has no effect on the direction of China Petroleum i.e., China Petroleum and Dongnan Electronics go up and down completely randomly.
Pair Corralation between China Petroleum and Dongnan Electronics
Assuming the 90 days trading horizon China Petroleum Chemical is expected to generate 0.46 times more return on investment than Dongnan Electronics. However, China Petroleum Chemical is 2.2 times less risky than Dongnan Electronics. It trades about 0.06 of its potential returns per unit of risk. Dongnan Electronics Co is currently generating about 0.02 per unit of risk. If you would invest 437.00 in China Petroleum Chemical on August 30, 2024 and sell it today you would earn a total of 201.00 from holding China Petroleum Chemical or generate 46.0% 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. Dongnan Electronics Co
Performance |
| Timeline |
| China Petroleum Chemical |
| Dongnan Electronics |
China Petroleum and Dongnan Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Petroleum and Dongnan Electronics
The main advantage of trading using opposite China Petroleum and Dongnan Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Petroleum position performs unexpectedly, Dongnan Electronics 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 Dongnan Electronics will offset losses from the drop in Dongnan Electronics' 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 |
| Dongnan Electronics vs. PetroChina Co Ltd | Dongnan Electronics vs. China State Construction | Dongnan Electronics vs. China Mobile Limited | Dongnan Electronics vs. Industrial and Commercial |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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