Correlation Between PetroChina and Asia Potash
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By analyzing existing cross correlation between PetroChina Co Ltd and Asia Potash International, you can compare the effects of market volatilities on PetroChina and Asia Potash 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 Asia Potash. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroChina and Asia Potash.
Diversification Opportunities for PetroChina and Asia Potash
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between PetroChina and Asia is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding PetroChina Co Ltd and Asia Potash International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Potash International 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 Asia Potash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Potash International has no effect on the direction of PetroChina i.e., PetroChina and Asia Potash go up and down completely randomly.
Pair Corralation between PetroChina and Asia Potash
Assuming the 90 days trading horizon PetroChina Co Ltd is expected to under-perform the Asia Potash. But the stock apears to be less risky and, when comparing its historical volatility, PetroChina Co Ltd is 1.35 times less risky than Asia Potash. The stock trades about -0.07 of its potential returns per unit of risk. The Asia Potash International is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,860 in Asia Potash International on September 3, 2024 and sell it today you would earn a total of 264.00 from holding Asia Potash International or generate 14.19% 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. Asia Potash International
Performance |
| Timeline |
| PetroChina |
| Asia Potash International |
PetroChina and Asia Potash Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PetroChina and Asia Potash
The main advantage of trading using opposite PetroChina and Asia Potash positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroChina position performs unexpectedly, Asia Potash 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 Asia Potash will offset losses from the drop in Asia Potash's long position.| PetroChina vs. China Express Airlines | PetroChina vs. Xinhua Winshare Publishing | PetroChina vs. Jinhui Liquor Co | PetroChina vs. Beijing Kaiwen Education |
| Asia Potash vs. Shandong Hongchuang Aluminum | Asia Potash vs. Shanghai Yanpu Metal | Asia Potash vs. Pengxin International Mining | Asia Potash vs. Western Metal Materials |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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