Correlation Between PetroChina and Shandong Huifa
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By analyzing existing cross correlation between PetroChina Co Ltd and Shandong Huifa Foodstuff, you can compare the effects of market volatilities on PetroChina and Shandong Huifa 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 Shandong Huifa. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroChina and Shandong Huifa.
Diversification Opportunities for PetroChina and Shandong Huifa
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between PetroChina and Shandong is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding PetroChina Co Ltd and Shandong Huifa Foodstuff in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Huifa Foodstuff 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 Shandong Huifa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Huifa Foodstuff has no effect on the direction of PetroChina i.e., PetroChina and Shandong Huifa go up and down completely randomly.
Pair Corralation between PetroChina and Shandong Huifa
Assuming the 90 days trading horizon PetroChina is expected to generate 6.31 times less return on investment than Shandong Huifa. But when comparing it to its historical volatility, PetroChina Co Ltd is 4.28 times less risky than Shandong Huifa. It trades about 0.22 of its potential returns per unit of risk. Shandong Huifa Foodstuff is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 1,050 in Shandong Huifa Foodstuff on September 13, 2024 and sell it today you would earn a total of 405.00 from holding Shandong Huifa Foodstuff or generate 38.57% 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. Shandong Huifa Foodstuff
Performance |
| Timeline |
| PetroChina |
| Shandong Huifa Foodstuff |
PetroChina and Shandong Huifa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PetroChina and Shandong Huifa
The main advantage of trading using opposite PetroChina and Shandong Huifa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroChina position performs unexpectedly, Shandong Huifa 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 Shandong Huifa will offset losses from the drop in Shandong Huifa's long position.| PetroChina vs. Ningxia Building Materials | PetroChina vs. Chongqing Sulian Plastic | PetroChina vs. Guangzhou Tinci Materials | PetroChina vs. Tianjin Pengling Rubber |
| Shandong Huifa vs. Nanjing Putian Telecommunications | Shandong Huifa vs. Tianjin Realty Development | Shandong Huifa vs. Kangyue Technology Co | Shandong Huifa vs. Shenzhen Hifuture Electric |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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