Correlation Between PetroChina and China Petroleum
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By analyzing existing cross correlation between PetroChina Co Ltd and China Petroleum Chemical, you can compare the effects of market volatilities on PetroChina and China Petroleum 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 Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroChina and China Petroleum.
Diversification Opportunities for PetroChina and China Petroleum
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PetroChina and China is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding PetroChina Co Ltd and China Petroleum Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Petroleum Chemical 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 Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Petroleum Chemical has no effect on the direction of PetroChina i.e., PetroChina and China Petroleum go up and down completely randomly.
Pair Corralation between PetroChina and China Petroleum
Assuming the 90 days trading horizon PetroChina Co Ltd is expected to generate 1.23 times more return on investment than China Petroleum. However, PetroChina is 1.23 times more volatile than China Petroleum Chemical. It trades about -0.01 of its potential returns per unit of risk. China Petroleum Chemical is currently generating about -0.05 per unit of risk. If you would invest 871.00 in PetroChina Co Ltd on November 2, 2024 and sell it today you would lose (38.00) from holding PetroChina Co Ltd or give up 4.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PetroChina Co Ltd vs. China Petroleum Chemical
Performance |
| Timeline |
| PetroChina |
| China Petroleum Chemical |
PetroChina and China Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PetroChina and China Petroleum
The main advantage of trading using opposite PetroChina and China Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroChina position performs unexpectedly, China Petroleum 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 Petroleum will offset losses from the drop in China Petroleum's long position.| PetroChina vs. Tongyu Communication | PetroChina vs. China Mobile Limited | PetroChina vs. CICT Mobile Communication | PetroChina vs. Wintao Communications Co |
| China Petroleum vs. Beijing Kingsoft Office | China Petroleum vs. Shandong Hi Speed RoadBridge | China Petroleum vs. Zhongshan Broad Ocean Motor | China Petroleum vs. AUPU Home Style |
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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