Correlation Between PetroChina and China State
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By analyzing existing cross correlation between PetroChina Co Ltd and China State Construction, you can compare the effects of market volatilities on PetroChina and China State 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 State. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroChina and China State.
Diversification Opportunities for PetroChina and China State
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between PetroChina and China is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding PetroChina Co Ltd and China State Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China State Construction 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 State. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China State Construction has no effect on the direction of PetroChina i.e., PetroChina and China State go up and down completely randomly.
Pair Corralation between PetroChina and China State
Assuming the 90 days trading horizon PetroChina Co Ltd is expected to under-perform the China State. But the stock apears to be less risky and, when comparing its historical volatility, PetroChina Co Ltd is 1.82 times less risky than China State. The stock trades about -0.17 of its potential returns per unit of risk. The China State Construction is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 614.00 in China State Construction on August 27, 2024 and sell it today you would lose (25.00) from holding China State Construction or give up 4.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PetroChina Co Ltd vs. China State Construction
Performance |
| Timeline |
| PetroChina |
| China State Construction |
PetroChina and China State Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PetroChina and China State
The main advantage of trading using opposite PetroChina and China State positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroChina position performs unexpectedly, China State 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 State will offset losses from the drop in China State's long position.| PetroChina vs. Sunwave Communications Co | PetroChina vs. City Development Environment | PetroChina vs. Gansu Jiu Steel | PetroChina vs. GreenTech Environmental Co |
| China State vs. Ming Yang Smart | China State vs. 159681 | China State vs. 159005 | China State vs. Loctek Ergonomic 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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