Correlation Between Long Yuan and CNOOC
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By analyzing existing cross correlation between Long Yuan Construction and CNOOC Limited, you can compare the effects of market volatilities on Long Yuan and CNOOC 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 Long Yuan with a short position of CNOOC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Long Yuan and CNOOC.
Diversification Opportunities for Long Yuan and CNOOC
Excellent diversification
The 3 months correlation between Long and CNOOC is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Long Yuan Construction and CNOOC Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNOOC Limited and Long Yuan 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 Long Yuan Construction are associated (or correlated) with CNOOC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNOOC Limited has no effect on the direction of Long Yuan i.e., Long Yuan and CNOOC go up and down completely randomly.
Pair Corralation between Long Yuan and CNOOC
Assuming the 90 days trading horizon Long Yuan Construction is expected to under-perform the CNOOC. In addition to that, Long Yuan is 1.63 times more volatile than CNOOC Limited. It trades about -0.44 of its total potential returns per unit of risk. CNOOC Limited is currently generating about 0.11 per unit of volatility. If you would invest 2,736 in CNOOC Limited on October 13, 2024 and sell it today you would earn a total of 89.00 from holding CNOOC Limited or generate 3.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Long Yuan Construction vs. CNOOC Limited
Performance |
| Timeline |
| Long Yuan Construction |
| CNOOC Limited |
Long Yuan and CNOOC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Long Yuan and CNOOC
The main advantage of trading using opposite Long Yuan and CNOOC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Long Yuan position performs unexpectedly, CNOOC 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 CNOOC will offset losses from the drop in CNOOC's long position.| Long Yuan vs. Agricultural Bank of | Long Yuan vs. Industrial and Commercial | Long Yuan vs. Bank of China | Long Yuan vs. PetroChina Co Ltd |
| CNOOC vs. China World Trade | CNOOC vs. Great Sun Foods Co | CNOOC vs. Masterwork Machinery | CNOOC vs. Long Yuan Construction |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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