Correlation Between PetroChina and CNOOC
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By analyzing existing cross correlation between PetroChina Co Ltd and CNOOC Limited, you can compare the effects of market volatilities on PetroChina and CNOOC 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 CNOOC. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroChina and CNOOC.
Diversification Opportunities for PetroChina and CNOOC
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between PetroChina and CNOOC is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding PetroChina Co Ltd and CNOOC Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNOOC Limited 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 CNOOC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNOOC Limited has no effect on the direction of PetroChina i.e., PetroChina and CNOOC go up and down completely randomly.
Pair Corralation between PetroChina and CNOOC
Assuming the 90 days trading horizon PetroChina Co Ltd is expected to under-perform the CNOOC. But the stock apears to be less risky and, when comparing its historical volatility, PetroChina Co Ltd is 1.16 times less risky than CNOOC. The stock trades about -0.17 of its potential returns per unit of risk. The CNOOC Limited is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 2,739 in CNOOC Limited on August 28, 2024 and sell it today you would lose (89.00) from holding CNOOC Limited or give up 3.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PetroChina Co Ltd vs. CNOOC Limited
Performance |
| Timeline |
| PetroChina |
| CNOOC Limited |
PetroChina and CNOOC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PetroChina and CNOOC
The main advantage of trading using opposite PetroChina and CNOOC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroChina position performs unexpectedly, CNOOC 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 CNOOC will offset losses from the drop in CNOOC's long position.| PetroChina vs. Sunwave Communications Co | PetroChina vs. City Development Environment | PetroChina vs. Gansu Jiu Steel | PetroChina vs. GreenTech Environmental Co |
| CNOOC vs. Unisplendour Corp | CNOOC vs. CGN Nuclear Technology | CNOOC vs. HanS Laser Tech | CNOOC vs. Jiujiang Shanshui Technology |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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