Correlation Between PetroChina and Hainan Airlines
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By analyzing existing cross correlation between PetroChina Co Ltd and Hainan Airlines Co, you can compare the effects of market volatilities on PetroChina and Hainan Airlines 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 Hainan Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroChina and Hainan Airlines.
Diversification Opportunities for PetroChina and Hainan Airlines
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PetroChina and Hainan is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding PetroChina Co Ltd and Hainan Airlines Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hainan Airlines 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 Hainan Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hainan Airlines has no effect on the direction of PetroChina i.e., PetroChina and Hainan Airlines go up and down completely randomly.
Pair Corralation between PetroChina and Hainan Airlines
Assuming the 90 days trading horizon PetroChina is expected to generate 1.45 times less return on investment than Hainan Airlines. But when comparing it to its historical volatility, PetroChina Co Ltd is 1.27 times less risky than Hainan Airlines. It trades about 0.03 of its potential returns per unit of risk. Hainan Airlines Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 146.00 in Hainan Airlines Co on September 1, 2024 and sell it today you would earn a total of 28.00 from holding Hainan Airlines Co or generate 19.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.62% |
| Values | Daily Returns |
PetroChina Co Ltd vs. Hainan Airlines Co
Performance |
| Timeline |
| PetroChina |
| Hainan Airlines |
PetroChina and Hainan Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PetroChina and Hainan Airlines
The main advantage of trading using opposite PetroChina and Hainan Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroChina position performs unexpectedly, Hainan Airlines 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 Hainan Airlines will offset losses from the drop in Hainan Airlines' long position.| PetroChina vs. Dongjiang Environmental Co | PetroChina vs. Tonghua Grape Wine | PetroChina vs. Dezhan HealthCare Co | PetroChina vs. Guangdong Liantai Environmental |
| Hainan Airlines vs. Linewell Software Co | Hainan Airlines vs. HanS Laser Tech | Hainan Airlines vs. Guangzhou KingTeller Technology | Hainan Airlines vs. Fujian Anjoy Foods |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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