Correlation Between China Pacific and PetroChina
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By analyzing existing cross correlation between China Pacific Insurance and PetroChina Co Ltd, you can compare the effects of market volatilities on China Pacific and PetroChina 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 China Pacific with a short position of PetroChina. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Pacific and PetroChina.
Diversification Opportunities for China Pacific and PetroChina
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and PetroChina is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding China Pacific Insurance and PetroChina Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetroChina and China Pacific 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 China Pacific Insurance are associated (or correlated) with PetroChina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PetroChina has no effect on the direction of China Pacific i.e., China Pacific and PetroChina go up and down completely randomly.
Pair Corralation between China Pacific and PetroChina
Assuming the 90 days trading horizon China Pacific Insurance is expected to under-perform the PetroChina. But the stock apears to be less risky and, when comparing its historical volatility, China Pacific Insurance is 1.13 times less risky than PetroChina. The stock trades about -0.07 of its potential returns per unit of risk. The PetroChina Co Ltd is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 808.00 in PetroChina Co Ltd on January 27, 2025 and sell it today you would lose (12.00) from holding PetroChina Co Ltd or give up 1.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Pacific Insurance vs. PetroChina Co Ltd
Performance |
| Timeline |
| China Pacific Insurance |
| PetroChina |
China Pacific and PetroChina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Pacific and PetroChina
The main advantage of trading using opposite China Pacific and PetroChina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Pacific position performs unexpectedly, PetroChina 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 PetroChina will offset losses from the drop in PetroChina's long position.| China Pacific vs. Biwin Storage Technology | China Pacific vs. Shanghai Luoman Lighting | China Pacific vs. Chengdu Kanghua Biological | China Pacific vs. Jiangsu HHCK Advanced |
| PetroChina vs. Nanning Chemical Industry | PetroChina vs. Shenzhen Shenbao Industrial | PetroChina vs. Hainan Mining Co | PetroChina vs. Shenyang Chemical Industry |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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