Correlation Between China Petroleum and Cambricon Technologies
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By analyzing existing cross correlation between China Petroleum Chemical and Cambricon Technologies Corp, you can compare the effects of market volatilities on China Petroleum and Cambricon Technologies 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 Cambricon Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Petroleum and Cambricon Technologies.
Diversification Opportunities for China Petroleum and Cambricon Technologies
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Cambricon is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding China Petroleum Chemical and Cambricon Technologies Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambricon Technologies 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 Cambricon Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambricon Technologies has no effect on the direction of China Petroleum i.e., China Petroleum and Cambricon Technologies go up and down completely randomly.
Pair Corralation between China Petroleum and Cambricon Technologies
Assuming the 90 days trading horizon China Petroleum Chemical is expected to under-perform the Cambricon Technologies. But the stock apears to be less risky and, when comparing its historical volatility, China Petroleum Chemical is 4.44 times less risky than Cambricon Technologies. The stock trades about -0.07 of its potential returns per unit of risk. The Cambricon Technologies Corp is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 43,470 in Cambricon Technologies Corp on August 28, 2024 and sell it today you would earn a total of 5,430 from holding Cambricon Technologies Corp or generate 12.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Petroleum Chemical vs. Cambricon Technologies Corp
Performance |
| Timeline |
| China Petroleum Chemical |
| Cambricon Technologies |
China Petroleum and Cambricon Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Petroleum and Cambricon Technologies
The main advantage of trading using opposite China Petroleum and Cambricon Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Petroleum position performs unexpectedly, Cambricon Technologies 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 Cambricon Technologies will offset losses from the drop in Cambricon Technologies' 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 |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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