Correlation Between PetroChina and Linzhou Heavy
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By analyzing existing cross correlation between PetroChina Co Ltd and Linzhou Heavy Machinery, you can compare the effects of market volatilities on PetroChina and Linzhou Heavy 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 Linzhou Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroChina and Linzhou Heavy.
Diversification Opportunities for PetroChina and Linzhou Heavy
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PetroChina and Linzhou is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding PetroChina Co Ltd and Linzhou Heavy Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Linzhou Heavy Machinery 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 Linzhou Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Linzhou Heavy Machinery has no effect on the direction of PetroChina i.e., PetroChina and Linzhou Heavy go up and down completely randomly.
Pair Corralation between PetroChina and Linzhou Heavy
Assuming the 90 days trading horizon PetroChina Co Ltd is expected to generate 0.58 times more return on investment than Linzhou Heavy. However, PetroChina Co Ltd is 1.73 times less risky than Linzhou Heavy. It trades about 0.18 of its potential returns per unit of risk. Linzhou Heavy Machinery is currently generating about -0.14 per unit of risk. If you would invest 834.00 in PetroChina Co Ltd on October 21, 2024 and sell it today you would earn a total of 49.00 from holding PetroChina Co Ltd or generate 5.88% 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. Linzhou Heavy Machinery
Performance |
| Timeline |
| PetroChina |
| Linzhou Heavy Machinery |
PetroChina and Linzhou Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PetroChina and Linzhou Heavy
The main advantage of trading using opposite PetroChina and Linzhou Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroChina position performs unexpectedly, Linzhou Heavy 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 Linzhou Heavy will offset losses from the drop in Linzhou Heavy's long position.| PetroChina vs. 360 Security Technology | PetroChina vs. Vontron Technology Co | PetroChina vs. Meinian Onehealth Healthcare | PetroChina vs. Jiugui Liquor Co |
| Linzhou Heavy vs. Hangzhou Pinming Software | Linzhou Heavy vs. Eastroc Beverage Group | Linzhou Heavy vs. Ningbo Ligong Online | Linzhou Heavy vs. Dareway Software Co |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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