Correlation Between PetroChina and Central Plains
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By analyzing existing cross correlation between PetroChina Co Ltd and Central Plains Environment, you can compare the effects of market volatilities on PetroChina and Central Plains 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 Central Plains. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroChina and Central Plains.
Diversification Opportunities for PetroChina and Central Plains
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between PetroChina and Central is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding PetroChina Co Ltd and Central Plains Environment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Plains Envir 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 Central Plains. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Plains Envir has no effect on the direction of PetroChina i.e., PetroChina and Central Plains go up and down completely randomly.
Pair Corralation between PetroChina and Central Plains
Assuming the 90 days trading horizon PetroChina is expected to generate 1.74 times less return on investment than Central Plains. But when comparing it to its historical volatility, PetroChina Co Ltd is 1.03 times less risky than Central Plains. It trades about 0.03 of its potential returns per unit of risk. Central Plains Environment is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 699.00 in Central Plains Environment on August 29, 2024 and sell it today you would earn a total of 176.00 from holding Central Plains Environment or generate 25.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PetroChina Co Ltd vs. Central Plains Environment
Performance |
| Timeline |
| PetroChina |
| Central Plains Envir |
PetroChina and Central Plains Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PetroChina and Central Plains
The main advantage of trading using opposite PetroChina and Central Plains positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroChina position performs unexpectedly, Central Plains 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 Central Plains will offset losses from the drop in Central Plains' long position.| PetroChina vs. Guilin Seamild Foods | PetroChina vs. Great Sun Foods Co | PetroChina vs. Jiahe Foods Industry | PetroChina vs. Lander Sports Development |
| Central Plains vs. PetroChina Co Ltd | Central Plains vs. China State Construction | Central Plains vs. China Mobile Limited | Central Plains vs. Industrial and Commercial |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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