Correlation Between China Telecom and PetroChina
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By analyzing existing cross correlation between China Telecom Corp and PetroChina Co Ltd, you can compare the effects of market volatilities on China Telecom 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 Telecom with a short position of PetroChina. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Telecom and PetroChina.
Diversification Opportunities for China Telecom and PetroChina
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and PetroChina is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding China Telecom Corp and PetroChina Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetroChina 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 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 Telecom i.e., China Telecom and PetroChina go up and down completely randomly.
Pair Corralation between China Telecom and PetroChina
Assuming the 90 days trading horizon China Telecom Corp is expected to generate 0.89 times more return on investment than PetroChina. However, China Telecom Corp is 1.13 times less risky than PetroChina. It trades about 0.1 of its potential returns per unit of risk. PetroChina Co Ltd is currently generating about -0.01 per unit of risk. If you would invest 606.00 in China Telecom Corp on November 2, 2024 and sell it today you would earn a total of 100.00 from holding China Telecom Corp or generate 16.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Telecom Corp vs. PetroChina Co Ltd
Performance |
| Timeline |
| China Telecom Corp |
| PetroChina |
China Telecom and PetroChina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Telecom and PetroChina
The main advantage of trading using opposite China Telecom and PetroChina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Telecom 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 Telecom vs. Guangdong Silvere Sci | China Telecom vs. Jiangyin Jianghua Microelectronics | China Telecom vs. Uroica Mining Safety | China Telecom vs. Weihai Honglin Electronic |
| PetroChina vs. Tongyu Communication | PetroChina vs. China Mobile Limited | PetroChina vs. CICT Mobile Communication | PetroChina vs. Wintao Communications 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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