Correlation Between China State and China Petroleum
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By analyzing existing cross correlation between China State Construction and China Petroleum Chemical, you can compare the effects of market volatilities on China State 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 China State with a short position of China Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of China State and China Petroleum.
Diversification Opportunities for China State and China Petroleum
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between China and China is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding China State Construction 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 China State 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 State Construction 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 China State i.e., China State and China Petroleum go up and down completely randomly.
Pair Corralation between China State and China Petroleum
Assuming the 90 days trading horizon China State Construction is expected to under-perform the China Petroleum. In addition to that, China State is 1.82 times more volatile than China Petroleum Chemical. It trades about -0.09 of its total potential returns per unit of risk. China Petroleum Chemical is currently generating about -0.11 per unit of volatility. If you would invest 644.00 in China Petroleum Chemical on August 27, 2024 and sell it today you would lose (17.00) from holding China Petroleum Chemical or give up 2.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China State Construction vs. China Petroleum Chemical
Performance |
| Timeline |
| China State Construction |
| China Petroleum Chemical |
China State and China Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China State and China Petroleum
The main advantage of trading using opposite China State and China Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China State 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.| China State vs. Ming Yang Smart | China State vs. 159681 | China State vs. 159005 | China State vs. Loctek Ergonomic Technology |
| China Petroleum vs. Winner Medical Co | China Petroleum vs. Jiujiang Shanshui Technology | China Petroleum vs. Northking Information Technology | China Petroleum vs. Tianshui Huatian Technology |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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