Correlation Between PetroChina and Wondershare Technology
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By analyzing existing cross correlation between PetroChina Co Ltd and Wondershare Technology Co, you can compare the effects of market volatilities on PetroChina and Wondershare Technology 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 Wondershare Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroChina and Wondershare Technology.
Diversification Opportunities for PetroChina and Wondershare Technology
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between PetroChina and Wondershare is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding PetroChina Co Ltd and Wondershare Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wondershare Technology 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 Wondershare Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wondershare Technology has no effect on the direction of PetroChina i.e., PetroChina and Wondershare Technology go up and down completely randomly.
Pair Corralation between PetroChina and Wondershare Technology
Assuming the 90 days trading horizon PetroChina is expected to generate 14.24 times less return on investment than Wondershare Technology. But when comparing it to its historical volatility, PetroChina Co Ltd is 3.66 times less risky than Wondershare Technology. It trades about 0.02 of its potential returns per unit of risk. Wondershare Technology Co is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 6,029 in Wondershare Technology Co on November 6, 2024 and sell it today you would earn a total of 817.00 from holding Wondershare Technology Co or generate 13.55% 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. Wondershare Technology Co
Performance |
| Timeline |
| PetroChina |
| Wondershare Technology |
PetroChina and Wondershare Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PetroChina and Wondershare Technology
The main advantage of trading using opposite PetroChina and Wondershare Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroChina position performs unexpectedly, Wondershare Technology 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 Wondershare Technology will offset losses from the drop in Wondershare Technology's long position.| PetroChina vs. China Publishing Media | PetroChina vs. Ningbo MedicalSystem Biotechnology | PetroChina vs. Southern PublishingMedia Co | PetroChina vs. Duzhe Publishing Media |
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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