Correlation Between Southchip Semiconductor and PetroChina
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By analyzing existing cross correlation between Southchip Semiconductor Technology and PetroChina Co Ltd, you can compare the effects of market volatilities on Southchip Semiconductor 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 Southchip Semiconductor with a short position of PetroChina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southchip Semiconductor and PetroChina.
Diversification Opportunities for Southchip Semiconductor and PetroChina
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Southchip and PetroChina is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Southchip Semiconductor Techno and PetroChina Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetroChina and Southchip Semiconductor 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 Southchip Semiconductor Technology 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 Southchip Semiconductor i.e., Southchip Semiconductor and PetroChina go up and down completely randomly.
Pair Corralation between Southchip Semiconductor and PetroChina
Assuming the 90 days trading horizon Southchip Semiconductor Technology is expected to generate 1.69 times more return on investment than PetroChina. However, Southchip Semiconductor is 1.69 times more volatile than PetroChina Co Ltd. It trades about 0.13 of its potential returns per unit of risk. PetroChina Co Ltd is currently generating about -0.25 per unit of risk. If you would invest 3,376 in Southchip Semiconductor Technology on November 7, 2024 and sell it today you would earn a total of 180.00 from holding Southchip Semiconductor Technology or generate 5.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southchip Semiconductor Techno vs. PetroChina Co Ltd
Performance |
| Timeline |
| Southchip Semiconductor |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| PetroChina |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Southchip Semiconductor and PetroChina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southchip Semiconductor and PetroChina
The main advantage of trading using opposite Southchip Semiconductor and PetroChina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southchip Semiconductor 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.The idea behind Southchip Semiconductor Technology and PetroChina Co Ltd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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