Correlation Between China Petroleum and Beijing Sanyuan
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By analyzing existing cross correlation between China Petroleum Chemical and Beijing Sanyuan Foods, you can compare the effects of market volatilities on China Petroleum and Beijing Sanyuan 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 Beijing Sanyuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Petroleum and Beijing Sanyuan.
Diversification Opportunities for China Petroleum and Beijing Sanyuan
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Beijing is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding China Petroleum Chemical and Beijing Sanyuan Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Sanyuan Foods 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 Beijing Sanyuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Sanyuan Foods has no effect on the direction of China Petroleum i.e., China Petroleum and Beijing Sanyuan go up and down completely randomly.
Pair Corralation between China Petroleum and Beijing Sanyuan
Assuming the 90 days trading horizon China Petroleum is expected to generate 1.35 times less return on investment than Beijing Sanyuan. But when comparing it to its historical volatility, China Petroleum Chemical is 1.13 times less risky than Beijing Sanyuan. It trades about 0.03 of its potential returns per unit of risk. Beijing Sanyuan Foods is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 392.00 in Beijing Sanyuan Foods on August 29, 2024 and sell it today you would earn a total of 48.00 from holding Beijing Sanyuan Foods or generate 12.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Petroleum Chemical vs. Beijing Sanyuan Foods
Performance |
| Timeline |
| China Petroleum Chemical |
| Beijing Sanyuan Foods |
China Petroleum and Beijing Sanyuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Petroleum and Beijing Sanyuan
The main advantage of trading using opposite China Petroleum and Beijing Sanyuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Petroleum position performs unexpectedly, Beijing Sanyuan 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 Beijing Sanyuan will offset losses from the drop in Beijing Sanyuan'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 |
| Beijing Sanyuan vs. Heilongjiang Transport Development | Beijing Sanyuan vs. Hainan Haiqi Transportation | Beijing Sanyuan vs. Advanced Technology Materials | Beijing Sanyuan vs. GRIPM Advanced Materials |
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 Stocks Directory module to find actively traded stocks across global markets.
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