Correlation Between PetroChina and Changchun Faway
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By analyzing existing cross correlation between PetroChina Co Ltd and Changchun Faway Automobile, you can compare the effects of market volatilities on PetroChina and Changchun Faway 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 Changchun Faway. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroChina and Changchun Faway.
Diversification Opportunities for PetroChina and Changchun Faway
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PetroChina and Changchun is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding PetroChina Co Ltd and Changchun Faway Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changchun Faway Auto 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 Changchun Faway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changchun Faway Auto has no effect on the direction of PetroChina i.e., PetroChina and Changchun Faway go up and down completely randomly.
Pair Corralation between PetroChina and Changchun Faway
Assuming the 90 days trading horizon PetroChina is expected to generate 2.2 times less return on investment than Changchun Faway. But when comparing it to its historical volatility, PetroChina Co Ltd is 1.19 times less risky than Changchun Faway. It trades about 0.02 of its potential returns per unit of risk. Changchun Faway Automobile is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 794.00 in Changchun Faway Automobile on September 4, 2024 and sell it today you would earn a total of 161.00 from holding Changchun Faway Automobile or generate 20.28% 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. Changchun Faway Automobile
Performance |
| Timeline |
| PetroChina |
| Changchun Faway Auto |
PetroChina and Changchun Faway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PetroChina and Changchun Faway
The main advantage of trading using opposite PetroChina and Changchun Faway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroChina position performs unexpectedly, Changchun Faway 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 Changchun Faway will offset losses from the drop in Changchun Faway's long position.| PetroChina vs. Sichuan Hebang Biotechnology | PetroChina vs. Guangdong Marubi Biotechnology | PetroChina vs. Shandong Sanyuan Biotechnology | PetroChina vs. Bloomage Biotechnology Corp |
| Changchun Faway vs. Cultural Investment Holdings | Changchun Faway vs. Gome Telecom Equipment | Changchun Faway vs. Bus Online Co | Changchun Faway vs. Holitech Technology Co |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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