Correlation Between Compagnie Plastic and PetroChina Company
Can any of the company-specific risk be diversified away by investing in both Compagnie Plastic and PetroChina Company 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 Compagnie Plastic and PetroChina Company into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compagnie Plastic Omnium and PetroChina Company Limited, you can compare the effects of market volatilities on Compagnie Plastic and PetroChina Company 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 Compagnie Plastic with a short position of PetroChina Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Plastic and PetroChina Company.
Diversification Opportunities for Compagnie Plastic and PetroChina Company
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Compagnie and PetroChina is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Plastic Omnium and PetroChina Company Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetroChina Limited and Compagnie Plastic 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 Compagnie Plastic Omnium are associated (or correlated) with PetroChina Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PetroChina Limited has no effect on the direction of Compagnie Plastic i.e., Compagnie Plastic and PetroChina Company go up and down completely randomly.
Pair Corralation between Compagnie Plastic and PetroChina Company
Assuming the 90 days horizon Compagnie Plastic Omnium is expected to generate 2.21 times more return on investment than PetroChina Company. However, Compagnie Plastic is 2.21 times more volatile than PetroChina Company Limited. It trades about 0.0 of its potential returns per unit of risk. PetroChina Company Limited is currently generating about -0.1 per unit of risk. If you would invest 1,054 in Compagnie Plastic Omnium on December 4, 2024 and sell it today you would lose (5.00) from holding Compagnie Plastic Omnium or give up 0.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compagnie Plastic Omnium vs. PetroChina Company Limited
Performance |
| Timeline |
| Compagnie Plastic Omnium |
| PetroChina Limited |
Compagnie Plastic and PetroChina Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie Plastic and PetroChina Company
The main advantage of trading using opposite Compagnie Plastic and PetroChina Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Plastic position performs unexpectedly, PetroChina Company 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 Company will offset losses from the drop in PetroChina Company's long position.| Compagnie Plastic vs. 24SEVENOFFICE GROUP AB | Compagnie Plastic vs. KENEDIX OFFICE INV | Compagnie Plastic vs. MAVEN WIRELESS SWEDEN | Compagnie Plastic vs. Verizon Communications |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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