Correlation Between NYSE Composite and PetroChina
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and PetroChina 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 NYSE Composite and PetroChina into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and PetroChina Co Ltd, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of PetroChina. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and PetroChina.
Diversification Opportunities for NYSE Composite and PetroChina
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and PetroChina is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and PetroChina Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetroChina and NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and PetroChina go up and down completely randomly.
Pair Corralation between NYSE Composite and PetroChina
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.19 times more return on investment than PetroChina. However, NYSE Composite is 5.24 times less risky than PetroChina. It trades about 0.14 of its potential returns per unit of risk. PetroChina Co Ltd is currently generating about -0.04 per unit of risk. If you would invest 1,950,172 in NYSE Composite on August 27, 2024 and sell it today you would earn a total of 71,864 from holding NYSE Composite or generate 3.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. PetroChina Co Ltd
Performance |
| Timeline |
NYSE Composite and PetroChina Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
PetroChina Co Ltd
Pair trading matchups for PetroChina
Pair Trading with NYSE Composite and PetroChina
The main advantage of trading using opposite NYSE Composite and PetroChina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Hooker Furniture | NYSE Composite vs. Hudson Pacific Properties | NYSE Composite vs. Canlan Ice Sports | NYSE Composite vs. Boston Properties |
| PetroChina vs. Equinor ASA ADR | PetroChina vs. TotalEnergies SE ADR | PetroChina vs. Ecopetrol SA ADR | PetroChina vs. National Fuel Gas |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |