Correlation Between PetroChina and Jiangsu Changfa
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By analyzing existing cross correlation between PetroChina Co Ltd and Jiangsu Changfa Refrigeration, you can compare the effects of market volatilities on PetroChina and Jiangsu Changfa 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 Jiangsu Changfa. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroChina and Jiangsu Changfa.
Diversification Opportunities for PetroChina and Jiangsu Changfa
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between PetroChina and Jiangsu is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding PetroChina Co Ltd and Jiangsu Changfa Refrigeration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Changfa Refr 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 Jiangsu Changfa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Changfa Refr has no effect on the direction of PetroChina i.e., PetroChina and Jiangsu Changfa go up and down completely randomly.
Pair Corralation between PetroChina and Jiangsu Changfa
Assuming the 90 days trading horizon PetroChina Co Ltd is expected to under-perform the Jiangsu Changfa. But the stock apears to be less risky and, when comparing its historical volatility, PetroChina Co Ltd is 2.25 times less risky than Jiangsu Changfa. The stock trades about -0.01 of its potential returns per unit of risk. The Jiangsu Changfa Refrigeration is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 509.00 in Jiangsu Changfa Refrigeration on September 8, 2024 and sell it today you would earn a total of 3.00 from holding Jiangsu Changfa Refrigeration or generate 0.59% 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. Jiangsu Changfa Refrigeration
Performance |
Timeline |
PetroChina |
Jiangsu Changfa Refr |
PetroChina and Jiangsu Changfa Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PetroChina and Jiangsu Changfa
The main advantage of trading using opposite PetroChina and Jiangsu Changfa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroChina position performs unexpectedly, Jiangsu Changfa 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 Jiangsu Changfa will offset losses from the drop in Jiangsu Changfa's long position.PetroChina vs. Runjian Communication Co | PetroChina vs. Oppein Home Group | PetroChina vs. Eastern Communications Co | PetroChina vs. Shandong Homey Aquatic |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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