Correlation Between Origin Energy and PetroChina
Can any of the company-specific risk be diversified away by investing in both Origin Energy 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 Origin Energy and PetroChina into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Energy Ltd and PetroChina Co Ltd, you can compare the effects of market volatilities on Origin Energy 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 Origin Energy with a short position of PetroChina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Energy and PetroChina.
Diversification Opportunities for Origin Energy and PetroChina
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Origin and PetroChina is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Origin Energy Ltd and PetroChina Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetroChina and Origin Energy 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 Origin Energy Ltd 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 Origin Energy i.e., Origin Energy and PetroChina go up and down completely randomly.
Pair Corralation between Origin Energy and PetroChina
Assuming the 90 days horizon Origin Energy Ltd is expected to generate 0.06 times more return on investment than PetroChina. However, Origin Energy Ltd is 17.77 times less risky than PetroChina. It trades about 0.21 of its potential returns per unit of risk. PetroChina Co Ltd is currently generating about -0.13 per unit of risk. If you would invest 658.00 in Origin Energy Ltd on August 24, 2024 and sell it today you would earn a total of 5.00 from holding Origin Energy Ltd or generate 0.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Energy Ltd vs. PetroChina Co Ltd
Performance |
| Timeline |
| Origin Energy |
| PetroChina |
Origin Energy and PetroChina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Energy and PetroChina
The main advantage of trading using opposite Origin Energy and PetroChina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Energy 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.| Origin Energy vs. BP plc | Origin Energy vs. China Petroleum Chemical | Origin Energy vs. TotalEnergies SE | Origin Energy vs. Shell PLC |
| PetroChina vs. Equinor ASA | PetroChina vs. Origin Energy Ltd | PetroChina vs. Shell PLC | PetroChina vs. Eni SpA ADR |
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 Stocks Directory module to find actively traded stocks across global markets.
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