Correlation Between Industrial Securities and China Petroleum
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By analyzing existing cross correlation between Industrial Securities Co and China Petroleum Chemical, you can compare the effects of market volatilities on Industrial Securities 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 Industrial Securities with a short position of China Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial Securities and China Petroleum.
Diversification Opportunities for Industrial Securities and China Petroleum
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Industrial and China is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Industrial Securities Co 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 Industrial Securities 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 Industrial Securities Co 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 Industrial Securities i.e., Industrial Securities and China Petroleum go up and down completely randomly.
Pair Corralation between Industrial Securities and China Petroleum
Assuming the 90 days trading horizon Industrial Securities is expected to generate 2.17 times less return on investment than China Petroleum. In addition to that, Industrial Securities is 1.07 times more volatile than China Petroleum Chemical. It trades about 0.03 of its total potential returns per unit of risk. China Petroleum Chemical is currently generating about 0.06 per unit of volatility. If you would invest 418.00 in China Petroleum Chemical on September 14, 2024 and sell it today you would earn a total of 228.00 from holding China Petroleum Chemical or generate 54.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Industrial Securities Co vs. China Petroleum Chemical
Performance |
| Timeline |
| Industrial Securities |
| China Petroleum Chemical |
Industrial Securities and China Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial Securities and China Petroleum
The main advantage of trading using opposite Industrial Securities and China Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial Securities 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.| Industrial Securities vs. China Petroleum Chemical | Industrial Securities vs. PetroChina Co Ltd | Industrial Securities vs. China State Construction | Industrial Securities vs. China Railway Group |
| China Petroleum vs. Qilu Bank Co | China Petroleum vs. Postal Savings Bank | China Petroleum vs. HeNan Splendor Science | China Petroleum vs. Western 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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