Correlation Between PetroChina Company and Benchmark Electronics
Can any of the company-specific risk be diversified away by investing in both PetroChina Company and Benchmark Electronics 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 PetroChina Company and Benchmark Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PetroChina Company Limited and Benchmark Electronics, you can compare the effects of market volatilities on PetroChina Company and Benchmark Electronics 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 PetroChina Company with a short position of Benchmark Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroChina Company and Benchmark Electronics.
Diversification Opportunities for PetroChina Company and Benchmark Electronics
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between PetroChina and Benchmark is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding PetroChina Company Limited and Benchmark Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benchmark Electronics and PetroChina Company 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 PetroChina Company Limited are associated (or correlated) with Benchmark Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Benchmark Electronics has no effect on the direction of PetroChina Company i.e., PetroChina Company and Benchmark Electronics go up and down completely randomly.
Pair Corralation between PetroChina Company and Benchmark Electronics
Assuming the 90 days horizon PetroChina Company Limited is expected to generate 1.72 times more return on investment than Benchmark Electronics. However, PetroChina Company is 1.72 times more volatile than Benchmark Electronics. It trades about 0.1 of its potential returns per unit of risk. Benchmark Electronics is currently generating about 0.09 per unit of risk. If you would invest 21.00 in PetroChina Company Limited on September 12, 2024 and sell it today you would earn a total of 50.00 from holding PetroChina Company Limited or generate 238.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PetroChina Company Limited vs. Benchmark Electronics
Performance |
| Timeline |
| PetroChina Limited |
| Benchmark Electronics |
PetroChina Company and Benchmark Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PetroChina Company and Benchmark Electronics
The main advantage of trading using opposite PetroChina Company and Benchmark Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroChina Company position performs unexpectedly, Benchmark Electronics 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 Benchmark Electronics will offset losses from the drop in Benchmark Electronics' long position.| PetroChina Company vs. Apple Inc | PetroChina Company vs. Apple Inc | PetroChina Company vs. Apple Inc | PetroChina Company vs. Apple Inc |
| Benchmark Electronics vs. Meiko Electronics Co | Benchmark Electronics vs. Superior Plus Corp | Benchmark Electronics vs. SIVERS SEMICONDUCTORS AB | Benchmark Electronics vs. Norsk Hydro ASA |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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