Correlation Between China Telecom and CNOOC
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By analyzing existing cross correlation between China Telecom Corp and CNOOC Limited, you can compare the effects of market volatilities on China Telecom 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 China Telecom with a short position of CNOOC. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Telecom and CNOOC.
Diversification Opportunities for China Telecom and CNOOC
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between China and CNOOC is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding China Telecom Corp and CNOOC Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNOOC Limited and China Telecom 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 Telecom Corp 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 China Telecom i.e., China Telecom and CNOOC go up and down completely randomly.
Pair Corralation between China Telecom and CNOOC
Assuming the 90 days trading horizon China Telecom Corp is expected to generate 1.41 times more return on investment than CNOOC. However, China Telecom is 1.41 times more volatile than CNOOC Limited. It trades about -0.03 of its potential returns per unit of risk. CNOOC Limited is currently generating about -0.16 per unit of risk. If you would invest 652.00 in China Telecom Corp on August 29, 2024 and sell it today you would lose (9.00) from holding China Telecom Corp or give up 1.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Telecom Corp vs. CNOOC Limited
Performance |
| Timeline |
| China Telecom Corp |
| CNOOC Limited |
China Telecom and CNOOC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Telecom and CNOOC
The main advantage of trading using opposite China Telecom and CNOOC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Telecom 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.| China Telecom vs. Chengdu Kanghua Biological | China Telecom vs. Beijing Wantai Biological | China Telecom vs. Suzhou Novoprotein Scientific | China Telecom vs. Aluminum Corp of |
| CNOOC vs. Zhejiang Kingland Pipeline | CNOOC vs. Xiangyang Automobile Bearing | CNOOC vs. BYD Co Ltd | CNOOC vs. Southern PublishingMedia 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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