Correlation Between Offshore Oil and China Telecom
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By analyzing existing cross correlation between Offshore Oil Engineering and China Telecom Corp, you can compare the effects of market volatilities on Offshore Oil and China Telecom 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 Offshore Oil with a short position of China Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Offshore Oil and China Telecom.
Diversification Opportunities for Offshore Oil and China Telecom
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Offshore and China is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Offshore Oil Engineering and China Telecom Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Telecom Corp and Offshore Oil 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 Offshore Oil Engineering are associated (or correlated) with China Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Telecom Corp has no effect on the direction of Offshore Oil i.e., Offshore Oil and China Telecom go up and down completely randomly.
Pair Corralation between Offshore Oil and China Telecom
Assuming the 90 days trading horizon Offshore Oil Engineering is expected to under-perform the China Telecom. But the stock apears to be less risky and, when comparing its historical volatility, Offshore Oil Engineering is 1.3 times less risky than China Telecom. The stock trades about -0.05 of its potential returns per unit of risk. The China Telecom Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 636.00 in China Telecom Corp on September 1, 2024 and sell it today you would earn a total of 11.00 from holding China Telecom Corp or generate 1.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Offshore Oil Engineering vs. China Telecom Corp
Performance |
| Timeline |
| Offshore Oil Engineering |
| China Telecom Corp |
Offshore Oil and China Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Offshore Oil and China Telecom
The main advantage of trading using opposite Offshore Oil and China Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Offshore Oil position performs unexpectedly, China Telecom 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 China Telecom will offset losses from the drop in China Telecom's long position.| Offshore Oil vs. Zhejiang Kingland Pipeline | Offshore Oil vs. ADAMA | Offshore Oil vs. Changchun Faway Automobile | Offshore Oil vs. Zhejiang Dahua Technology |
| China Telecom vs. Guangzhou Ruoyuchen Information | China Telecom vs. China Marine Information | China Telecom vs. Shanghai Rightongene Biotechnology | China Telecom vs. ButOne Information Corp |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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