Correlation Between PetroChina and Sichuan Furong
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By analyzing existing cross correlation between PetroChina Co Ltd and Sichuan Furong Technology, you can compare the effects of market volatilities on PetroChina and Sichuan Furong 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 Sichuan Furong. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroChina and Sichuan Furong.
Diversification Opportunities for PetroChina and Sichuan Furong
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between PetroChina and Sichuan is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding PetroChina Co Ltd and Sichuan Furong Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Furong Technology 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 Sichuan Furong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Furong Technology has no effect on the direction of PetroChina i.e., PetroChina and Sichuan Furong go up and down completely randomly.
Pair Corralation between PetroChina and Sichuan Furong
Assuming the 90 days trading horizon PetroChina is expected to generate 13.37 times less return on investment than Sichuan Furong. But when comparing it to its historical volatility, PetroChina Co Ltd is 22.68 times less risky than Sichuan Furong. It trades about 0.07 of its potential returns per unit of risk. Sichuan Furong Technology is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,197 in Sichuan Furong Technology on September 26, 2024 and sell it today you would earn a total of 78.00 from holding Sichuan Furong Technology or generate 6.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
PetroChina Co Ltd vs. Sichuan Furong Technology
Performance |
| Timeline |
| PetroChina |
| Sichuan Furong Technology |
PetroChina and Sichuan Furong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PetroChina and Sichuan Furong
The main advantage of trading using opposite PetroChina and Sichuan Furong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroChina position performs unexpectedly, Sichuan Furong 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 Sichuan Furong will offset losses from the drop in Sichuan Furong's long position.| PetroChina vs. Zhejiang Kingland Pipeline | PetroChina vs. Jiangsu Zhongtian Technology | PetroChina vs. Shaanxi Beiyuan Chemical | PetroChina vs. Sinomine Resource Exploration |
| Sichuan Furong vs. Bank of China | Sichuan Furong vs. Kweichow Moutai Co | Sichuan Furong vs. PetroChina Co Ltd | Sichuan Furong vs. Bank of Communications |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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