Correlation Between China Petroleum and China Telecom
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By analyzing existing cross correlation between China Petroleum Chemical and China Telecom Corp, you can compare the effects of market volatilities on China Petroleum and China Telecom 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 China Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Petroleum and China Telecom.
Diversification Opportunities for China Petroleum and China Telecom
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and China is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding China Petroleum Chemical and China Telecom Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Telecom Corp 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 China Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Telecom Corp has no effect on the direction of China Petroleum i.e., China Petroleum and China Telecom go up and down completely randomly.
Pair Corralation between China Petroleum and China Telecom
Assuming the 90 days trading horizon China Petroleum Chemical is expected to under-perform the China Telecom. But the stock apears to be less risky and, when comparing its historical volatility, China Petroleum Chemical is 1.09 times less risky than China Telecom. The stock trades about -0.05 of its potential returns per unit of risk. The China Telecom Corp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 606.00 in China Telecom Corp on November 2, 2024 and sell it today you would earn a total of 100.00 from holding China Telecom Corp or generate 16.5% 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. China Telecom Corp
Performance |
| Timeline |
| China Petroleum Chemical |
| China Telecom Corp |
China Petroleum and China Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Petroleum and China Telecom
The main advantage of trading using opposite China Petroleum and China Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Petroleum position performs unexpectedly, China Telecom 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 China Telecom will offset losses from the drop in China Telecom's long position.| China Petroleum vs. Beijing Kingsoft Office | China Petroleum vs. Shandong Hi Speed RoadBridge | China Petroleum vs. Zhongshan Broad Ocean Motor | China Petroleum vs. AUPU Home Style |
| China Telecom vs. Guangdong Silvere Sci | China Telecom vs. Jiangyin Jianghua Microelectronics | China Telecom vs. Uroica Mining Safety | China Telecom vs. Weihai Honglin Electronic |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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