Correlation Between PetroChina and Aba Chemicals
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By analyzing existing cross correlation between PetroChina Co Ltd and Aba Chemicals Corp, you can compare the effects of market volatilities on PetroChina and Aba Chemicals 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 Aba Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroChina and Aba Chemicals.
Diversification Opportunities for PetroChina and Aba Chemicals
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PetroChina and Aba is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding PetroChina Co Ltd and Aba Chemicals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aba Chemicals Corp 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 Aba Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aba Chemicals Corp has no effect on the direction of PetroChina i.e., PetroChina and Aba Chemicals go up and down completely randomly.
Pair Corralation between PetroChina and Aba Chemicals
Assuming the 90 days trading horizon PetroChina Co Ltd is expected to generate 0.57 times more return on investment than Aba Chemicals. However, PetroChina Co Ltd is 1.76 times less risky than Aba Chemicals. It trades about 0.06 of its potential returns per unit of risk. Aba Chemicals Corp is currently generating about -0.01 per unit of risk. If you would invest 495.00 in PetroChina Co Ltd on September 2, 2024 and sell it today you would earn a total of 309.00 from holding PetroChina Co Ltd or generate 62.42% 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. Aba Chemicals Corp
Performance |
| Timeline |
| PetroChina |
| Aba Chemicals Corp |
PetroChina and Aba Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PetroChina and Aba Chemicals
The main advantage of trading using opposite PetroChina and Aba Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroChina position performs unexpectedly, Aba Chemicals 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 Aba Chemicals will offset losses from the drop in Aba Chemicals' long position.| PetroChina vs. Zotye Automobile Co | PetroChina vs. Zhejiang Qianjiang Motorcycle | PetroChina vs. Miracll Chemicals Co | PetroChina vs. Bus Online Co |
| Aba Chemicals vs. Zijin Mining Group | Aba Chemicals vs. Wanhua Chemical Group | Aba Chemicals vs. Baoshan Iron Steel | Aba Chemicals vs. Shandong Gold Mining |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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