Correlation Between PetroChina and Xinjiang Communications
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By analyzing existing cross correlation between PetroChina Co Ltd and Xinjiang Communications Construction, you can compare the effects of market volatilities on PetroChina and Xinjiang Communications 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 Xinjiang Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroChina and Xinjiang Communications.
Diversification Opportunities for PetroChina and Xinjiang Communications
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between PetroChina and Xinjiang is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding PetroChina Co Ltd and Xinjiang Communications Constr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinjiang Communications 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 Xinjiang Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinjiang Communications has no effect on the direction of PetroChina i.e., PetroChina and Xinjiang Communications go up and down completely randomly.
Pair Corralation between PetroChina and Xinjiang Communications
Assuming the 90 days trading horizon PetroChina Co Ltd is expected to under-perform the Xinjiang Communications. But the stock apears to be less risky and, when comparing its historical volatility, PetroChina Co Ltd is 1.5 times less risky than Xinjiang Communications. The stock trades about -0.04 of its potential returns per unit of risk. The Xinjiang Communications Construction is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,005 in Xinjiang Communications Construction on September 13, 2024 and sell it today you would earn a total of 303.00 from holding Xinjiang Communications Construction or generate 30.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PetroChina Co Ltd vs. Xinjiang Communications Constr
Performance |
| Timeline |
| PetroChina |
| Xinjiang Communications |
PetroChina and Xinjiang Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PetroChina and Xinjiang Communications
The main advantage of trading using opposite PetroChina and Xinjiang Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroChina position performs unexpectedly, Xinjiang Communications 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 Xinjiang Communications will offset losses from the drop in Xinjiang Communications' long position.| PetroChina vs. Ningxia Building Materials | PetroChina vs. Chongqing Sulian Plastic | PetroChina vs. Guangzhou Tinci Materials | PetroChina vs. Tianjin Pengling Rubber |
| Xinjiang Communications vs. Industrial and Commercial | Xinjiang Communications vs. Kweichow Moutai Co | Xinjiang Communications vs. Agricultural Bank of | Xinjiang Communications vs. China Mobile Limited |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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