Correlation Between PetroChina and XCMG Construction
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By analyzing existing cross correlation between PetroChina Co Ltd and XCMG Construction Machinery, you can compare the effects of market volatilities on PetroChina and XCMG Construction 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 PetroChina with a short position of XCMG Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroChina and XCMG Construction.
Diversification Opportunities for PetroChina and XCMG Construction
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PetroChina and XCMG is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding PetroChina Co Ltd and XCMG Construction Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XCMG Construction and PetroChina 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 PetroChina Co Ltd are associated (or correlated) with XCMG Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XCMG Construction has no effect on the direction of PetroChina i.e., PetroChina and XCMG Construction go up and down completely randomly.
Pair Corralation between PetroChina and XCMG Construction
Assuming the 90 days trading horizon PetroChina Co Ltd is expected to generate 0.98 times more return on investment than XCMG Construction. However, PetroChina Co Ltd is 1.02 times less risky than XCMG Construction. It trades about 0.05 of its potential returns per unit of risk. XCMG Construction Machinery is currently generating about 0.03 per unit of risk. If you would invest 541.00 in PetroChina Co Ltd on November 27, 2024 and sell it today you would earn a total of 249.00 from holding PetroChina Co Ltd or generate 46.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PetroChina Co Ltd vs. XCMG Construction Machinery
Performance |
| Timeline |
| PetroChina |
| XCMG Construction |
PetroChina and XCMG Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PetroChina and XCMG Construction
The main advantage of trading using opposite PetroChina and XCMG Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroChina position performs unexpectedly, XCMG Construction 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 XCMG Construction will offset losses from the drop in XCMG Construction's long position.| PetroChina vs. Xinxiang Chemical Fiber | PetroChina vs. Duzhe Publishing Media | PetroChina vs. Mega info Media CoLtd | PetroChina vs. Longxing Chemical Stock |
| XCMG Construction vs. Jiangsu Yanghe Brewery | XCMG Construction vs. Beijing Yanjing Brewery | XCMG Construction vs. Wasu Media Holding | XCMG Construction vs. Chengdu B ray Media |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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