Correlation Between Industrial and CNOOC
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By analyzing existing cross correlation between Industrial and Commercial and CNOOC Limited, you can compare the effects of market volatilities on Industrial 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 Industrial with a short position of CNOOC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial and CNOOC.
Diversification Opportunities for Industrial and CNOOC
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Industrial and CNOOC is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Industrial and Commercial and CNOOC Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNOOC Limited and Industrial 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 and Commercial 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 Industrial i.e., Industrial and CNOOC go up and down completely randomly.
Pair Corralation between Industrial and CNOOC
Assuming the 90 days trading horizon Industrial and Commercial is expected to generate 0.89 times more return on investment than CNOOC. However, Industrial and Commercial is 1.13 times less risky than CNOOC. It trades about 0.15 of its potential returns per unit of risk. CNOOC Limited is currently generating about -0.16 per unit of risk. If you would invest 661.00 in Industrial and Commercial on November 5, 2024 and sell it today you would earn a total of 21.00 from holding Industrial and Commercial or generate 3.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrial and Commercial vs. CNOOC Limited
Performance |
| Timeline |
| Industrial and Commercial |
| CNOOC Limited |
Industrial and CNOOC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial and CNOOC
The main advantage of trading using opposite Industrial and CNOOC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial 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.| Industrial vs. China World Trade | Industrial vs. Yili Chuanning Biotechnology | Industrial vs. Wuhan Hvsen Biotechnology | Industrial vs. Anhui Huilong Agricultural |
| CNOOC vs. Longmaster Information Tech | CNOOC vs. Emdoor Information Co | CNOOC vs. Shenzhen Zqgame | CNOOC vs. Guangdong TianYiMa Information |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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