Correlation Between China Petroleum and Jinhui Liquor
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By analyzing existing cross correlation between China Petroleum Chemical and Jinhui Liquor Co, you can compare the effects of market volatilities on China Petroleum and Jinhui Liquor 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 Jinhui Liquor. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Petroleum and Jinhui Liquor.
Diversification Opportunities for China Petroleum and Jinhui Liquor
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Jinhui is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding China Petroleum Chemical and Jinhui Liquor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinhui Liquor 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 Jinhui Liquor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinhui Liquor has no effect on the direction of China Petroleum i.e., China Petroleum and Jinhui Liquor go up and down completely randomly.
Pair Corralation between China Petroleum and Jinhui Liquor
Assuming the 90 days trading horizon China Petroleum Chemical is expected to generate 0.71 times more return on investment than Jinhui Liquor. However, China Petroleum Chemical is 1.41 times less risky than Jinhui Liquor. It trades about 0.02 of its potential returns per unit of risk. Jinhui Liquor Co is currently generating about -0.02 per unit of risk. If you would invest 553.00 in China Petroleum Chemical on November 27, 2024 and sell it today you would earn a total of 35.00 from holding China Petroleum Chemical or generate 6.33% 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. Jinhui Liquor Co
Performance |
| Timeline |
| China Petroleum Chemical |
| Jinhui Liquor |
China Petroleum and Jinhui Liquor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Petroleum and Jinhui Liquor
The main advantage of trading using opposite China Petroleum and Jinhui Liquor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Petroleum position performs unexpectedly, Jinhui Liquor 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 Jinhui Liquor will offset losses from the drop in Jinhui Liquor's long position.| China Petroleum vs. Allwin Telecommunication Co | China Petroleum vs. Guangxi Wuzhou Communications | China Petroleum vs. Shenzhen Noposion Agrochemicals | China Petroleum vs. Shenzhen Topway Video |
| Jinhui Liquor vs. Fujian Newland Computer | Jinhui Liquor vs. Wintao Communications Co | Jinhui Liquor vs. Gansu Huangtai Wine marketing | Jinhui Liquor vs. Shanghai Shibei Hi Tech |
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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