Correlation Between PetroChina and China Railway
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By analyzing existing cross correlation between PetroChina Co Ltd and China Railway Construction, you can compare the effects of market volatilities on PetroChina and China Railway 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 Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroChina and China Railway.
Diversification Opportunities for PetroChina and China Railway
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between PetroChina and China is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding PetroChina Co Ltd and China Railway Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Railway Constr 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 Railway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Railway Constr has no effect on the direction of PetroChina i.e., PetroChina and China Railway go up and down completely randomly.
Pair Corralation between PetroChina and China Railway
Assuming the 90 days trading horizon PetroChina Co Ltd is expected to under-perform the China Railway. But the stock apears to be less risky and, when comparing its historical volatility, PetroChina Co Ltd is 1.18 times less risky than China Railway. The stock trades about -0.08 of its potential returns per unit of risk. The China Railway Construction is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 884.00 in China Railway Construction on August 25, 2024 and sell it today you would earn a total of 35.00 from holding China Railway Construction or generate 3.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PetroChina Co Ltd vs. China Railway Construction
Performance |
| Timeline |
| PetroChina |
| China Railway Constr |
PetroChina and China Railway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PetroChina and China Railway
The main advantage of trading using opposite PetroChina and China Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroChina position performs unexpectedly, China Railway 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 Railway will offset losses from the drop in China Railway's long position.| PetroChina vs. Zhejiang Kingland Pipeline | PetroChina vs. COL Digital Publishing | PetroChina vs. Suzhou Novoprotein Scientific | PetroChina vs. Xiangyang Automobile Bearing |
| China Railway vs. Jinhui Mining Co | China Railway vs. Keda Clean Energy | China Railway vs. Xinjiang Baodi Mining | China Railway vs. Shandong Longquan Pipeline |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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