Correlation Between China Petroleum and Weihai Honglin
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By analyzing existing cross correlation between China Petroleum Chemical and Weihai Honglin Electronic, you can compare the effects of market volatilities on China Petroleum and Weihai Honglin 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 Weihai Honglin. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Petroleum and Weihai Honglin.
Diversification Opportunities for China Petroleum and Weihai Honglin
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Weihai is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding China Petroleum Chemical and Weihai Honglin Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weihai Honglin Electronic 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 Weihai Honglin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weihai Honglin Electronic has no effect on the direction of China Petroleum i.e., China Petroleum and Weihai Honglin go up and down completely randomly.
Pair Corralation between China Petroleum and Weihai Honglin
Assuming the 90 days trading horizon China Petroleum Chemical is expected to generate 0.55 times more return on investment than Weihai Honglin. However, China Petroleum Chemical is 1.81 times less risky than Weihai Honglin. It trades about -0.04 of its potential returns per unit of risk. Weihai Honglin Electronic is currently generating about -0.18 per unit of risk. If you would invest 644.00 in China Petroleum Chemical on August 29, 2024 and sell it today you would lose (8.00) from holding China Petroleum Chemical or give up 1.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Petroleum Chemical vs. Weihai Honglin Electronic
Performance |
| Timeline |
| China Petroleum Chemical |
| Weihai Honglin Electronic |
China Petroleum and Weihai Honglin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Petroleum and Weihai Honglin
The main advantage of trading using opposite China Petroleum and Weihai Honglin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Petroleum position performs unexpectedly, Weihai Honglin 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 Weihai Honglin will offset losses from the drop in Weihai Honglin's long position.| China Petroleum vs. Hefei Metalforming Mach | China Petroleum vs. Xinjiang Baodi Mining | China Petroleum vs. Guangdong Jingyi Metal | China Petroleum vs. Hainan Mining Co |
| Weihai Honglin vs. Kweichow Moutai Co | Weihai Honglin vs. Shenzhen Mindray Bio Medical | Weihai Honglin vs. Jiangsu Pacific Quartz | Weihai Honglin vs. G bits Network Technology |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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