Correlation Between PetroChina and Sinomach Automobile
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By analyzing existing cross correlation between PetroChina Co Ltd and Sinomach Automobile Co, you can compare the effects of market volatilities on PetroChina and Sinomach 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 Sinomach Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroChina and Sinomach Automobile.
Diversification Opportunities for PetroChina and Sinomach Automobile
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between PetroChina and Sinomach is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding PetroChina Co Ltd and Sinomach Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinomach 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 Sinomach Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinomach Automobile has no effect on the direction of PetroChina i.e., PetroChina and Sinomach Automobile go up and down completely randomly.
Pair Corralation between PetroChina and Sinomach Automobile
Assuming the 90 days trading horizon PetroChina Co Ltd is expected to under-perform the Sinomach Automobile. But the stock apears to be less risky and, when comparing its historical volatility, PetroChina Co Ltd is 1.25 times less risky than Sinomach Automobile. The stock trades about -0.06 of its potential returns per unit of risk. The Sinomach Automobile Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 648.00 in Sinomach Automobile Co on September 3, 2024 and sell it today you would earn a total of 13.00 from holding Sinomach Automobile Co or generate 2.01% 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. Sinomach Automobile Co
Performance |
| Timeline |
| PetroChina |
| Sinomach Automobile |
PetroChina and Sinomach Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PetroChina and Sinomach Automobile
The main advantage of trading using opposite PetroChina and Sinomach Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroChina position performs unexpectedly, Sinomach 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 Sinomach Automobile will offset losses from the drop in Sinomach Automobile's long position.| PetroChina vs. China Express Airlines | PetroChina vs. Xinhua Winshare Publishing | PetroChina vs. Jinhui Liquor Co | PetroChina vs. Beijing Kaiwen Education |
| Sinomach Automobile vs. PetroChina Co Ltd | Sinomach Automobile vs. China Mobile Limited | Sinomach Automobile vs. Industrial and Commercial | Sinomach Automobile vs. China Life Insurance |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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