Correlation Between China Petroleum and Chongqing Brewery
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By analyzing existing cross correlation between China Petroleum Chemical and Chongqing Brewery Co, you can compare the effects of market volatilities on China Petroleum and Chongqing Brewery 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 Chongqing Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Petroleum and Chongqing Brewery.
Diversification Opportunities for China Petroleum and Chongqing Brewery
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between China and Chongqing is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding China Petroleum Chemical and Chongqing Brewery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Brewery 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 Chongqing Brewery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Brewery has no effect on the direction of China Petroleum i.e., China Petroleum and Chongqing Brewery go up and down completely randomly.
Pair Corralation between China Petroleum and Chongqing Brewery
Assuming the 90 days trading horizon China Petroleum Chemical is expected to under-perform the Chongqing Brewery. But the stock apears to be less risky and, when comparing its historical volatility, China Petroleum Chemical is 1.49 times less risky than Chongqing Brewery. The stock trades about -0.06 of its potential returns per unit of risk. The Chongqing Brewery Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 5,433 in Chongqing Brewery Co on August 29, 2024 and sell it today you would earn a total of 649.00 from holding Chongqing Brewery Co or generate 11.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Petroleum Chemical vs. Chongqing Brewery Co
Performance |
| Timeline |
| China Petroleum Chemical |
| Chongqing Brewery |
China Petroleum and Chongqing Brewery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Petroleum and Chongqing Brewery
The main advantage of trading using opposite China Petroleum and Chongqing Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Petroleum position performs unexpectedly, Chongqing Brewery 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 Chongqing Brewery will offset losses from the drop in Chongqing Brewery's 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 |
| Chongqing Brewery vs. PetroChina Co Ltd | Chongqing Brewery vs. China Mobile Limited | Chongqing Brewery vs. Ping An Insurance | Chongqing Brewery vs. China Petroleum Chemical |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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