Correlation Between Shanghai Action and China Petroleum
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By analyzing existing cross correlation between Shanghai Action Education and China Petroleum Chemical, you can compare the effects of market volatilities on Shanghai Action and China Petroleum 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 Shanghai Action with a short position of China Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Action and China Petroleum.
Diversification Opportunities for Shanghai Action and China Petroleum
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Shanghai and China is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Action Education and China Petroleum Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Petroleum Chemical and Shanghai Action 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 Shanghai Action Education are associated (or correlated) with China Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Petroleum Chemical has no effect on the direction of Shanghai Action i.e., Shanghai Action and China Petroleum go up and down completely randomly.
Pair Corralation between Shanghai Action and China Petroleum
Assuming the 90 days trading horizon Shanghai Action is expected to generate 1.22 times less return on investment than China Petroleum. In addition to that, Shanghai Action is 3.42 times more volatile than China Petroleum Chemical. It trades about 0.04 of its total potential returns per unit of risk. China Petroleum Chemical is currently generating about 0.15 per unit of volatility. If you would invest 618.00 in China Petroleum Chemical on September 1, 2024 and sell it today you would earn a total of 18.00 from holding China Petroleum Chemical or generate 2.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Action Education vs. China Petroleum Chemical
Performance |
| Timeline |
| Shanghai Action Education |
| China Petroleum Chemical |
Shanghai Action and China Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Action and China Petroleum
The main advantage of trading using opposite Shanghai Action and China Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Action position performs unexpectedly, China Petroleum 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 China Petroleum will offset losses from the drop in China Petroleum's long position.| Shanghai Action vs. China State Construction | Shanghai Action vs. China Merchants Shekou | Shanghai Action vs. Huafa Industrial Co | Shanghai Action vs. China International Capital |
| China Petroleum vs. Shanghai Material Trading | China Petroleum vs. Dazhong Transportation Group | China Petroleum vs. Luyin Investment Group | China Petroleum vs. Hubeiyichang Transportation Group |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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