Correlation Between PetroChina and Masterwork Machinery
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By analyzing existing cross correlation between PetroChina Co Ltd and Masterwork Machinery, you can compare the effects of market volatilities on PetroChina and Masterwork Machinery 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 Masterwork Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroChina and Masterwork Machinery.
Diversification Opportunities for PetroChina and Masterwork Machinery
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PetroChina and Masterwork is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding PetroChina Co Ltd and Masterwork Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Masterwork 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 Masterwork Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Masterwork Machinery has no effect on the direction of PetroChina i.e., PetroChina and Masterwork Machinery go up and down completely randomly.
Pair Corralation between PetroChina and Masterwork Machinery
Assuming the 90 days trading horizon PetroChina Co Ltd is expected to under-perform the Masterwork Machinery. But the stock apears to be less risky and, when comparing its historical volatility, PetroChina Co Ltd is 1.71 times less risky than Masterwork Machinery. The stock trades about -0.25 of its potential returns per unit of risk. The Masterwork Machinery is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 514.00 in Masterwork Machinery on November 5, 2024 and sell it today you would earn a total of 46.00 from holding Masterwork Machinery or generate 8.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PetroChina Co Ltd vs. Masterwork Machinery
Performance |
| Timeline |
| PetroChina |
| Masterwork Machinery |
PetroChina and Masterwork Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PetroChina and Masterwork Machinery
The main advantage of trading using opposite PetroChina and Masterwork Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroChina position performs unexpectedly, Masterwork Machinery 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 Masterwork Machinery will offset losses from the drop in Masterwork Machinery's long position.| PetroChina vs. Fujian Longzhou Transportation | PetroChina vs. Eyebright Medical Technology | PetroChina vs. Cabio Biotech Wuhan | PetroChina vs. Montage Technology 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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