Correlation Between PetroChina and Beijing Shanghai
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By analyzing existing cross correlation between PetroChina Co Ltd and Beijing Shanghai High Speed, you can compare the effects of market volatilities on PetroChina and Beijing Shanghai 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 Beijing Shanghai. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroChina and Beijing Shanghai.
Diversification Opportunities for PetroChina and Beijing Shanghai
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PetroChina and Beijing is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding PetroChina Co Ltd and Beijing Shanghai High Speed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Shanghai High 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 Beijing Shanghai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Shanghai High has no effect on the direction of PetroChina i.e., PetroChina and Beijing Shanghai go up and down completely randomly.
Pair Corralation between PetroChina and Beijing Shanghai
Assuming the 90 days trading horizon PetroChina Co Ltd is expected to under-perform the Beijing Shanghai. But the stock apears to be less risky and, when comparing its historical volatility, PetroChina Co Ltd is 1.3 times less risky than Beijing Shanghai. The stock trades about -0.21 of its potential returns per unit of risk. The Beijing Shanghai High Speed is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 565.00 in Beijing Shanghai High Speed on August 25, 2024 and sell it today you would lose (12.00) from holding Beijing Shanghai High Speed or give up 2.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PetroChina Co Ltd vs. Beijing Shanghai High Speed
Performance |
| Timeline |
| PetroChina |
| Beijing Shanghai High |
PetroChina and Beijing Shanghai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PetroChina and Beijing Shanghai
The main advantage of trading using opposite PetroChina and Beijing Shanghai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroChina position performs unexpectedly, Beijing Shanghai 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 Beijing Shanghai will offset losses from the drop in Beijing Shanghai's long position.| PetroChina vs. Zhejiang Kingland Pipeline | PetroChina vs. COL Digital Publishing | PetroChina vs. Suzhou Novoprotein Scientific | PetroChina vs. Xiangyang Automobile Bearing |
| Beijing Shanghai vs. CSSC Offshore Marine | Beijing Shanghai vs. Jonjee Hi tech Industrial | Beijing Shanghai vs. ChengDu Hi Tech Development | Beijing Shanghai vs. Suzhou Mingzhi 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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