Correlation Between China Petroleum and Bank of Communications
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By analyzing existing cross correlation between China Petroleum Chemical and Bank of Communications, you can compare the effects of market volatilities on China Petroleum and Bank of Communications 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 Bank of Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Petroleum and Bank of Communications.
Diversification Opportunities for China Petroleum and Bank of Communications
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Bank is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding China Petroleum Chemical and Bank of Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Communications 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 Bank of Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Communications has no effect on the direction of China Petroleum i.e., China Petroleum and Bank of Communications go up and down completely randomly.
Pair Corralation between China Petroleum and Bank of Communications
Assuming the 90 days trading horizon China Petroleum is expected to generate 9.21 times less return on investment than Bank of Communications. In addition to that, China Petroleum is 1.03 times more volatile than Bank of Communications. It trades about 0.0 of its total potential returns per unit of risk. Bank of Communications is currently generating about 0.04 per unit of volatility. If you would invest 705.00 in Bank of Communications on August 29, 2024 and sell it today you would earn a total of 42.00 from holding Bank of Communications or generate 5.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Petroleum Chemical vs. Bank of Communications
Performance |
| Timeline |
| China Petroleum Chemical |
| Bank of Communications |
China Petroleum and Bank of Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Petroleum and Bank of Communications
The main advantage of trading using opposite China Petroleum and Bank of Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Petroleum position performs unexpectedly, Bank of Communications 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 Bank of Communications will offset losses from the drop in Bank of Communications' 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 |
| Bank of Communications vs. Kweichow Moutai Co | Bank of Communications vs. Contemporary Amperex Technology | Bank of Communications vs. G bits Network Technology | Bank of Communications vs. BYD Co Ltd |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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