Correlation Between China Petroleum and Datang HuaYin
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By analyzing existing cross correlation between China Petroleum Chemical and Datang HuaYin Electric, you can compare the effects of market volatilities on China Petroleum and Datang HuaYin 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 Datang HuaYin. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Petroleum and Datang HuaYin.
Diversification Opportunities for China Petroleum and Datang HuaYin
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Datang is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding China Petroleum Chemical and Datang HuaYin Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datang HuaYin Electric 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 Datang HuaYin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Datang HuaYin Electric has no effect on the direction of China Petroleum i.e., China Petroleum and Datang HuaYin go up and down completely randomly.
Pair Corralation between China Petroleum and Datang HuaYin
Assuming the 90 days trading horizon China Petroleum Chemical is expected to under-perform the Datang HuaYin. But the stock apears to be less risky and, when comparing its historical volatility, China Petroleum Chemical is 1.75 times less risky than Datang HuaYin. The stock trades about -0.06 of its potential returns per unit of risk. The Datang HuaYin Electric is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 307.00 in Datang HuaYin Electric on August 28, 2024 and sell it today you would earn a total of 28.00 from holding Datang HuaYin Electric or generate 9.12% 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. Datang HuaYin Electric
Performance |
| Timeline |
| China Petroleum Chemical |
| Datang HuaYin Electric |
China Petroleum and Datang HuaYin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Petroleum and Datang HuaYin
The main advantage of trading using opposite China Petroleum and Datang HuaYin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Petroleum position performs unexpectedly, Datang HuaYin 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 Datang HuaYin will offset losses from the drop in Datang HuaYin'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 |
| Datang HuaYin vs. Industrial and Commercial | Datang HuaYin vs. China Construction Bank | Datang HuaYin vs. Agricultural Bank of | Datang HuaYin vs. Bank of China |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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