Correlation Between PetroChina and Hongrun Construction
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By analyzing existing cross correlation between PetroChina Co Ltd and Hongrun Construction Group, you can compare the effects of market volatilities on PetroChina and Hongrun 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 Hongrun Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroChina and Hongrun Construction.
Diversification Opportunities for PetroChina and Hongrun Construction
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PetroChina and Hongrun is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding PetroChina Co Ltd and Hongrun Construction Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hongrun 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 Hongrun Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hongrun Construction has no effect on the direction of PetroChina i.e., PetroChina and Hongrun Construction go up and down completely randomly.
Pair Corralation between PetroChina and Hongrun Construction
Assuming the 90 days trading horizon PetroChina Co Ltd is expected to under-perform the Hongrun Construction. But the stock apears to be less risky and, when comparing its historical volatility, PetroChina Co Ltd is 1.14 times less risky than Hongrun Construction. The stock trades about -0.08 of its potential returns per unit of risk. The Hongrun Construction Group is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 408.00 in Hongrun Construction Group on August 29, 2024 and sell it today you would earn a total of 28.00 from holding Hongrun Construction Group or generate 6.86% 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. Hongrun Construction Group
Performance |
| Timeline |
| PetroChina |
| Hongrun Construction |
PetroChina and Hongrun Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PetroChina and Hongrun Construction
The main advantage of trading using opposite PetroChina and Hongrun Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroChina position performs unexpectedly, Hongrun 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 Hongrun Construction will offset losses from the drop in Hongrun Construction's long position.| PetroChina vs. Guilin Seamild Foods | PetroChina vs. Great Sun Foods Co | PetroChina vs. Jiahe Foods Industry | PetroChina vs. Lander Sports Development |
| Hongrun Construction vs. PetroChina Co Ltd | Hongrun Construction vs. China State Construction | Hongrun Construction vs. China Mobile Limited | Hongrun Construction 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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