Correlation Between CNOOC and China Petroleum
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By analyzing existing cross correlation between CNOOC Limited and China Petroleum Chemical, you can compare the effects of market volatilities on CNOOC and China Petroleum 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 CNOOC with a short position of China Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNOOC and China Petroleum.
Diversification Opportunities for CNOOC and China Petroleum
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CNOOC and China is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding CNOOC Limited and China Petroleum Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Petroleum Chemical and CNOOC 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 CNOOC Limited are associated (or correlated) with China Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Petroleum Chemical has no effect on the direction of CNOOC i.e., CNOOC and China Petroleum go up and down completely randomly.
Pair Corralation between CNOOC and China Petroleum
Assuming the 90 days trading horizon CNOOC Limited is expected to under-perform the China Petroleum. In addition to that, CNOOC is 1.16 times more volatile than China Petroleum Chemical. It trades about -0.16 of its total potential returns per unit of risk. China Petroleum Chemical is currently generating about -0.04 per unit of volatility. If you would invest 644.00 in China Petroleum Chemical on August 29, 2024 and sell it today you would lose (8.00) from holding China Petroleum Chemical or give up 1.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CNOOC Limited vs. China Petroleum Chemical
Performance |
| Timeline |
| CNOOC Limited |
| China Petroleum Chemical |
CNOOC and China Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNOOC and China Petroleum
The main advantage of trading using opposite CNOOC and China Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNOOC position performs unexpectedly, China Petroleum 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 Petroleum will offset losses from the drop in China Petroleum's long position.| CNOOC vs. Zhejiang Kingland Pipeline | CNOOC vs. Xiangyang Automobile Bearing | CNOOC vs. BYD Co Ltd | CNOOC vs. Southern PublishingMedia Co |
| China Petroleum vs. Hefei Metalforming Mach | China Petroleum vs. Xinjiang Baodi Mining | China Petroleum vs. Guangdong Jingyi Metal | China Petroleum vs. Hainan Mining Co |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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