Correlation Between China Railway and PetroChina
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By analyzing existing cross correlation between China Railway Construction and PetroChina Co Ltd, you can compare the effects of market volatilities on China Railway 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 China Railway with a short position of PetroChina. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Railway and PetroChina.
Diversification Opportunities for China Railway and PetroChina
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between China and PetroChina is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding China Railway Construction and PetroChina Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetroChina and China Railway 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 China Railway Construction 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 China Railway i.e., China Railway and PetroChina go up and down completely randomly.
Pair Corralation between China Railway and PetroChina
Assuming the 90 days trading horizon China Railway Construction is expected to generate 1.81 times more return on investment than PetroChina. However, China Railway is 1.81 times more volatile than PetroChina Co Ltd. It trades about 0.2 of its potential returns per unit of risk. PetroChina Co Ltd is currently generating about -0.17 per unit of risk. If you would invest 439.00 in China Railway Construction on August 28, 2024 and sell it today you would earn a total of 38.00 from holding China Railway Construction or generate 8.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Railway Construction vs. PetroChina Co Ltd
Performance |
| Timeline |
| China Railway Constr |
| PetroChina |
China Railway and PetroChina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Railway and PetroChina
The main advantage of trading using opposite China Railway and PetroChina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Railway 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.| China Railway vs. Biwin Storage Technology | China Railway vs. PetroChina Co Ltd | China Railway vs. Industrial and Commercial | China Railway vs. China Construction Bank |
| 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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