Correlation Between China Petroleum and Sichuan Teway
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By analyzing existing cross correlation between China Petroleum Chemical and Sichuan Teway Food, you can compare the effects of market volatilities on China Petroleum and Sichuan Teway 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 Sichuan Teway. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Petroleum and Sichuan Teway.
Diversification Opportunities for China Petroleum and Sichuan Teway
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Sichuan is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding China Petroleum Chemical and Sichuan Teway Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Teway Food 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 Sichuan Teway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Teway Food has no effect on the direction of China Petroleum i.e., China Petroleum and Sichuan Teway go up and down completely randomly.
Pair Corralation between China Petroleum and Sichuan Teway
Assuming the 90 days trading horizon China Petroleum Chemical is expected to generate 0.41 times more return on investment than Sichuan Teway. However, China Petroleum Chemical is 2.43 times less risky than Sichuan Teway. It trades about -0.04 of its potential returns per unit of risk. Sichuan Teway Food is currently generating about -0.07 per unit of risk. If you would invest 644.00 in China Petroleum Chemical on August 29, 2024 and sell it today you would lose (8.00) from holding China Petroleum Chemical or give up 1.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Petroleum Chemical vs. Sichuan Teway Food
Performance |
| Timeline |
| China Petroleum Chemical |
| Sichuan Teway Food |
China Petroleum and Sichuan Teway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Petroleum and Sichuan Teway
The main advantage of trading using opposite China Petroleum and Sichuan Teway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Petroleum position performs unexpectedly, Sichuan Teway 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 Sichuan Teway will offset losses from the drop in Sichuan Teway's 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 |
| Sichuan Teway vs. PetroChina Co Ltd | Sichuan Teway vs. China Mobile Limited | Sichuan Teway vs. Ping An Insurance | Sichuan Teway vs. China Petroleum Chemical |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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