Correlation Between China Petroleum and Industrial
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By analyzing existing cross correlation between China Petroleum Chemical and Industrial and Commercial, you can compare the effects of market volatilities on China Petroleum and Industrial 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 Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Petroleum and Industrial.
Diversification Opportunities for China Petroleum and Industrial
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Industrial is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding China Petroleum Chemical and Industrial and Commercial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial and Commercial 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 Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrial and Commercial has no effect on the direction of China Petroleum i.e., China Petroleum and Industrial go up and down completely randomly.
Pair Corralation between China Petroleum and Industrial
Assuming the 90 days trading horizon China Petroleum Chemical is expected to under-perform the Industrial. In addition to that, China Petroleum is 1.22 times more volatile than Industrial and Commercial. It trades about -0.11 of its total potential returns per unit of risk. Industrial and Commercial is currently generating about -0.01 per unit of volatility. If you would invest 607.00 in Industrial and Commercial on August 27, 2024 and sell it today you would lose (2.00) from holding Industrial and Commercial or give up 0.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Petroleum Chemical vs. Industrial and Commercial
Performance |
| Timeline |
| China Petroleum Chemical |
| Industrial and Commercial |
China Petroleum and Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Petroleum and Industrial
The main advantage of trading using opposite China Petroleum and Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Petroleum position performs unexpectedly, Industrial 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 Industrial will offset losses from the drop in Industrial's long position.| China Petroleum vs. Winner Medical Co | China Petroleum vs. Jiujiang Shanshui Technology | China Petroleum vs. Northking Information Technology | China Petroleum vs. Tianshui Huatian Technology |
| Industrial vs. MayAir Technology Co | Industrial vs. Hubei Yingtong Telecommunication | Industrial vs. Jilin Jlu Communication | Industrial vs. Eastern Communications Co |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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