Correlation Between Shin Hai and National Petroleum
Can any of the company-specific risk be diversified away by investing in both Shin Hai and National Petroleum at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Shin Hai and National Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shin Hai Gas and National Petroleum Co, you can compare the effects of market volatilities on Shin Hai and National 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 Shin Hai with a short position of National Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shin Hai and National Petroleum.
Diversification Opportunities for Shin Hai and National Petroleum
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Shin and National is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Shin Hai Gas and National Petroleum Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Petroleum and Shin Hai 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 Shin Hai Gas are associated (or correlated) with National Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Petroleum has no effect on the direction of Shin Hai i.e., Shin Hai and National Petroleum go up and down completely randomly.
Pair Corralation between Shin Hai and National Petroleum
Assuming the 90 days trading horizon Shin Hai Gas is expected to generate 1.03 times more return on investment than National Petroleum. However, Shin Hai is 1.03 times more volatile than National Petroleum Co. It trades about -0.04 of its potential returns per unit of risk. National Petroleum Co is currently generating about -0.24 per unit of risk. If you would invest 5,270 in Shin Hai Gas on September 12, 2024 and sell it today you would lose (40.00) from holding Shin Hai Gas or give up 0.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shin Hai Gas vs. National Petroleum Co
Performance |
| Timeline |
| Shin Hai Gas |
| National Petroleum |
Shin Hai and National Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shin Hai and National Petroleum
The main advantage of trading using opposite Shin Hai and National Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin Hai position performs unexpectedly, National 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 National Petroleum will offset losses from the drop in National Petroleum's long position.| Shin Hai vs. Golden Biotechnology | Shin Hai vs. PlayNitride | Shin Hai vs. MedFirst Healthcare Services | Shin Hai vs. Sunnic Technology Merchandise |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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