Correlation Between PetroChina and Nantong Haixing
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By analyzing existing cross correlation between PetroChina Co Ltd and Nantong Haixing Electronics, you can compare the effects of market volatilities on PetroChina and Nantong Haixing 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 Nantong Haixing. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroChina and Nantong Haixing.
Diversification Opportunities for PetroChina and Nantong Haixing
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PetroChina and Nantong is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding PetroChina Co Ltd and Nantong Haixing Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nantong Haixing Elec 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 Nantong Haixing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nantong Haixing Elec has no effect on the direction of PetroChina i.e., PetroChina and Nantong Haixing go up and down completely randomly.
Pair Corralation between PetroChina and Nantong Haixing
Assuming the 90 days trading horizon PetroChina Co Ltd is expected to under-perform the Nantong Haixing. But the stock apears to be less risky and, when comparing its historical volatility, PetroChina Co Ltd is 1.95 times less risky than Nantong Haixing. The stock trades about -0.03 of its potential returns per unit of risk. The Nantong Haixing Electronics is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,373 in Nantong Haixing Electronics on September 1, 2024 and sell it today you would earn a total of 37.00 from holding Nantong Haixing Electronics or generate 2.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PetroChina Co Ltd vs. Nantong Haixing Electronics
Performance |
| Timeline |
| PetroChina |
| Nantong Haixing Elec |
PetroChina and Nantong Haixing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PetroChina and Nantong Haixing
The main advantage of trading using opposite PetroChina and Nantong Haixing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroChina position performs unexpectedly, Nantong Haixing 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 Nantong Haixing will offset losses from the drop in Nantong Haixing's long position.| PetroChina vs. Dongjiang Environmental Co | PetroChina vs. Tonghua Grape Wine | PetroChina vs. Dezhan HealthCare Co | PetroChina vs. Guangdong Liantai Environmental |
| Nantong Haixing vs. Cultural Investment Holdings | Nantong Haixing vs. Gome Telecom Equipment | Nantong Haixing vs. Bus Online Co | Nantong Haixing vs. Holitech Technology Co |
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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