Correlation Between PetroChina and Guangzhou Restaurants
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By analyzing existing cross correlation between PetroChina Co Ltd and Guangzhou Restaurants Group, you can compare the effects of market volatilities on PetroChina and Guangzhou Restaurants 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 Guangzhou Restaurants. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroChina and Guangzhou Restaurants.
Diversification Opportunities for PetroChina and Guangzhou Restaurants
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between PetroChina and Guangzhou is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding PetroChina Co Ltd and Guangzhou Restaurants Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Restaurants 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 Guangzhou Restaurants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Restaurants has no effect on the direction of PetroChina i.e., PetroChina and Guangzhou Restaurants go up and down completely randomly.
Pair Corralation between PetroChina and Guangzhou Restaurants
Assuming the 90 days trading horizon PetroChina Co Ltd is expected to under-perform the Guangzhou Restaurants. But the stock apears to be less risky and, when comparing its historical volatility, PetroChina Co Ltd is 2.2 times less risky than Guangzhou Restaurants. The stock trades about -0.17 of its potential returns per unit of risk. The Guangzhou Restaurants Group is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,613 in Guangzhou Restaurants Group on September 2, 2024 and sell it today you would earn a total of 40.00 from holding Guangzhou Restaurants Group or generate 2.48% 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. Guangzhou Restaurants Group
Performance |
| Timeline |
| PetroChina |
| Guangzhou Restaurants |
PetroChina and Guangzhou Restaurants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PetroChina and Guangzhou Restaurants
The main advantage of trading using opposite PetroChina and Guangzhou Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroChina position performs unexpectedly, Guangzhou Restaurants 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 Guangzhou Restaurants will offset losses from the drop in Guangzhou Restaurants' long position.| PetroChina vs. Zotye Automobile Co | PetroChina vs. Zhejiang Qianjiang Motorcycle | PetroChina vs. Miracll Chemicals Co | PetroChina vs. Bus Online Co |
| Guangzhou Restaurants vs. China State Construction | Guangzhou Restaurants vs. Poly Real Estate | Guangzhou Restaurants vs. China Vanke Co | Guangzhou Restaurants vs. China Merchants Shekou |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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