Correlation Between China Petroleum and Shanghai CEO
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By analyzing existing cross correlation between China Petroleum Chemical and Shanghai CEO Environmental, you can compare the effects of market volatilities on China Petroleum and Shanghai CEO 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 Shanghai CEO. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Petroleum and Shanghai CEO.
Diversification Opportunities for China Petroleum and Shanghai CEO
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between China and Shanghai is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding China Petroleum Chemical and Shanghai CEO Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai CEO Environ 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 Shanghai CEO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai CEO Environ has no effect on the direction of China Petroleum i.e., China Petroleum and Shanghai CEO go up and down completely randomly.
Pair Corralation between China Petroleum and Shanghai CEO
Assuming the 90 days trading horizon China Petroleum Chemical is expected to under-perform the Shanghai CEO. But the stock apears to be less risky and, when comparing its historical volatility, China Petroleum Chemical is 1.6 times less risky than Shanghai CEO. The stock trades about -0.04 of its potential returns per unit of risk. The Shanghai CEO Environmental is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 795.00 in Shanghai CEO Environmental on October 26, 2024 and sell it today you would earn a total of 49.00 from holding Shanghai CEO Environmental or generate 6.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Petroleum Chemical vs. Shanghai CEO Environmental
Performance |
| Timeline |
| China Petroleum Chemical |
| Shanghai CEO Environ |
China Petroleum and Shanghai CEO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Petroleum and Shanghai CEO
The main advantage of trading using opposite China Petroleum and Shanghai CEO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Petroleum position performs unexpectedly, Shanghai CEO 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 Shanghai CEO will offset losses from the drop in Shanghai CEO's long position.| China Petroleum vs. JuneYao Dairy Co | China Petroleum vs. Everjoy Health Group | China Petroleum vs. Jiahe Foods Industry | China Petroleum vs. Meinian Onehealth Healthcare |
| Shanghai CEO vs. China Petroleum Chemical | Shanghai CEO vs. PetroChina Co Ltd | Shanghai CEO vs. China State Construction | Shanghai CEO vs. China Railway Group |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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