Correlation Between PetroChina and China World
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By analyzing existing cross correlation between PetroChina Co Ltd and China World Trade, you can compare the effects of market volatilities on PetroChina and China World 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 China World. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroChina and China World.
Diversification Opportunities for PetroChina and China World
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PetroChina and China is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding PetroChina Co Ltd and China World Trade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China World Trade 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 China World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China World Trade has no effect on the direction of PetroChina i.e., PetroChina and China World go up and down completely randomly.
Pair Corralation between PetroChina and China World
Assuming the 90 days trading horizon PetroChina Co Ltd is expected to generate 0.89 times more return on investment than China World. However, PetroChina Co Ltd is 1.12 times less risky than China World. It trades about 0.33 of its potential returns per unit of risk. China World Trade is currently generating about 0.18 per unit of risk. If you would invest 803.00 in PetroChina Co Ltd on September 28, 2024 and sell it today you would earn a total of 94.00 from holding PetroChina Co Ltd or generate 11.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PetroChina Co Ltd vs. China World Trade
Performance |
| Timeline |
| PetroChina |
| China World Trade |
PetroChina and China World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PetroChina and China World
The main advantage of trading using opposite PetroChina and China World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroChina position performs unexpectedly, China World 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 China World will offset losses from the drop in China World's long position.| PetroChina vs. Ping An Insurance | PetroChina vs. Qilu Bank Co | PetroChina vs. China Construction Bank | PetroChina vs. Bank of Suzhou |
| China World vs. Tianshui Huatian Technology | China World vs. Uxi Unicomp Technology | China World vs. Olympic Circuit Technology | China World vs. Pengxin International 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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