Correlation Between Bank of China and PetroChina
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By analyzing existing cross correlation between Bank of China and PetroChina Co Ltd, you can compare the effects of market volatilities on Bank of China and PetroChina 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 Bank of China with a short position of PetroChina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and PetroChina.
Diversification Opportunities for Bank of China and PetroChina
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and PetroChina is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and PetroChina Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetroChina and Bank of China 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 Bank of China are associated (or correlated) with PetroChina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PetroChina has no effect on the direction of Bank of China i.e., Bank of China and PetroChina go up and down completely randomly.
Pair Corralation between Bank of China and PetroChina
Assuming the 90 days trading horizon Bank of China is expected to generate 0.82 times more return on investment than PetroChina. However, Bank of China is 1.22 times less risky than PetroChina. It trades about 0.04 of its potential returns per unit of risk. PetroChina Co Ltd is currently generating about -0.18 per unit of risk. If you would invest 488.00 in Bank of China on August 27, 2024 and sell it today you would earn a total of 3.00 from holding Bank of China or generate 0.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of China vs. PetroChina Co Ltd
Performance |
| Timeline |
| Bank of China |
| PetroChina |
Bank of China and PetroChina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and PetroChina
The main advantage of trading using opposite Bank of China and PetroChina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, PetroChina 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 PetroChina will offset losses from the drop in PetroChina's long position.| Bank of China vs. Harbin Air Conditioning | Bank of China vs. Heilongjiang Transport Development | Bank of China vs. Impulse Qingdao Health | Bank of China vs. Yunnan Jianzhijia Health Chain |
| PetroChina vs. Sunwave Communications Co | PetroChina vs. City Development Environment | PetroChina vs. Gansu Jiu Steel | PetroChina vs. GreenTech Environmental 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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