Correlation Between China Petroleum and Beijing Shanghai
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By analyzing existing cross correlation between China Petroleum Chemical and Beijing Shanghai High Speed, you can compare the effects of market volatilities on China Petroleum and Beijing Shanghai 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 Shanghai. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Petroleum and Beijing Shanghai.
Diversification Opportunities for China Petroleum and Beijing Shanghai
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Beijing is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding China Petroleum Chemical and Beijing Shanghai High Speed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Shanghai High 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 Shanghai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Shanghai High has no effect on the direction of China Petroleum i.e., China Petroleum and Beijing Shanghai go up and down completely randomly.
Pair Corralation between China Petroleum and Beijing Shanghai
Assuming the 90 days trading horizon China Petroleum Chemical is expected to under-perform the Beijing Shanghai. But the stock apears to be less risky and, when comparing its historical volatility, China Petroleum Chemical is 1.31 times less risky than Beijing Shanghai. The stock trades about -0.11 of its potential returns per unit of risk. The Beijing Shanghai High Speed is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 561.00 in Beijing Shanghai High Speed on August 26, 2024 and sell it today you would lose (8.00) from holding Beijing Shanghai High Speed or give up 1.43% 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. Beijing Shanghai High Speed
Performance |
| Timeline |
| China Petroleum Chemical |
| Beijing Shanghai High |
China Petroleum and Beijing Shanghai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Petroleum and Beijing Shanghai
The main advantage of trading using opposite China Petroleum and Beijing Shanghai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Petroleum position performs unexpectedly, Beijing Shanghai 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 Shanghai will offset losses from the drop in Beijing Shanghai's long position.| China Petroleum vs. Nantong Haixing Electronics | China Petroleum vs. CITIC Metal Co | China Petroleum vs. Guangzhou Dongfang Hotel | China Petroleum vs. Unigroup Guoxin Microelectronics |
| Beijing Shanghai vs. CSSC Offshore Marine | Beijing Shanghai vs. Jonjee Hi tech Industrial | Beijing Shanghai vs. ChengDu Hi Tech Development | Beijing Shanghai vs. Suzhou Mingzhi Technology |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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