Correlation Between PetroChina and Dongfeng Automobile
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By analyzing existing cross correlation between PetroChina Co Ltd and Dongfeng Automobile Co, you can compare the effects of market volatilities on PetroChina and Dongfeng Automobile 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 Dongfeng Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroChina and Dongfeng Automobile.
Diversification Opportunities for PetroChina and Dongfeng Automobile
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between PetroChina and Dongfeng is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding PetroChina Co Ltd and Dongfeng Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongfeng Automobile 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 Dongfeng Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongfeng Automobile has no effect on the direction of PetroChina i.e., PetroChina and Dongfeng Automobile go up and down completely randomly.
Pair Corralation between PetroChina and Dongfeng Automobile
Assuming the 90 days trading horizon PetroChina Co Ltd is expected to under-perform the Dongfeng Automobile. But the stock apears to be less risky and, when comparing its historical volatility, PetroChina Co Ltd is 2.54 times less risky than Dongfeng Automobile. The stock trades about -0.01 of its potential returns per unit of risk. The Dongfeng Automobile Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 677.00 in Dongfeng Automobile Co on October 26, 2024 and sell it today you would earn a total of 15.00 from holding Dongfeng Automobile Co or generate 2.22% 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. Dongfeng Automobile Co
Performance |
| Timeline |
| PetroChina |
| Dongfeng Automobile |
PetroChina and Dongfeng Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PetroChina and Dongfeng Automobile
The main advantage of trading using opposite PetroChina and Dongfeng Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroChina position performs unexpectedly, Dongfeng Automobile 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 Dongfeng Automobile will offset losses from the drop in Dongfeng Automobile's long position.| PetroChina vs. Heilongjiang Transport Development | PetroChina vs. Unisplendour Corp | PetroChina vs. Strait Innovation Internet | PetroChina vs. Beijing Seeyon Internet |
| Dongfeng Automobile vs. China Longyuan Power | Dongfeng Automobile vs. PetroChina Co Ltd | Dongfeng Automobile vs. Guangxi Guiguan Electric | Dongfeng Automobile vs. Yantai North Andre |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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