Correlation Between PetroChina and Allied Machinery
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By analyzing existing cross correlation between PetroChina Co Ltd and Allied Machinery Co, you can compare the effects of market volatilities on PetroChina and Allied Machinery 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 Allied Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroChina and Allied Machinery.
Diversification Opportunities for PetroChina and Allied Machinery
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between PetroChina and Allied is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding PetroChina Co Ltd and Allied Machinery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allied Machinery 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 Allied Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allied Machinery has no effect on the direction of PetroChina i.e., PetroChina and Allied Machinery go up and down completely randomly.
Pair Corralation between PetroChina and Allied Machinery
Assuming the 90 days trading horizon PetroChina Co Ltd is expected to under-perform the Allied Machinery. But the stock apears to be less risky and, when comparing its historical volatility, PetroChina Co Ltd is 3.84 times less risky than Allied Machinery. The stock trades about -0.25 of its potential returns per unit of risk. The Allied Machinery Co is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,819 in Allied Machinery Co on November 6, 2024 and sell it today you would earn a total of 172.00 from holding Allied Machinery Co or generate 9.46% 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. Allied Machinery Co
Performance |
| Timeline |
| PetroChina |
| Allied Machinery |
PetroChina and Allied Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PetroChina and Allied Machinery
The main advantage of trading using opposite PetroChina and Allied Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroChina position performs unexpectedly, Allied Machinery 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 Allied Machinery will offset losses from the drop in Allied Machinery's long position.| PetroChina vs. China Publishing Media | PetroChina vs. Ningbo MedicalSystem Biotechnology | PetroChina vs. Southern PublishingMedia Co | PetroChina vs. Duzhe Publishing Media |
| Allied Machinery vs. China Life Insurance | Allied Machinery vs. Shaanxi Meineng Clean | Allied Machinery vs. Masterwork Machinery | Allied Machinery vs. Everdisplay Optronics Shanghai |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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