Correlation Between PetroChina Company and TotalEnergies
Can any of the company-specific risk be diversified away by investing in both PetroChina Company and TotalEnergies 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 TotalEnergies 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 TotalEnergies SE, you can compare the effects of market volatilities on PetroChina Company and TotalEnergies 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 TotalEnergies. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroChina Company and TotalEnergies.
Diversification Opportunities for PetroChina Company and TotalEnergies
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between PetroChina and TotalEnergies is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding PetroChina Company Limited and TotalEnergies SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TotalEnergies SE 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 TotalEnergies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TotalEnergies SE has no effect on the direction of PetroChina Company i.e., PetroChina Company and TotalEnergies go up and down completely randomly.
Pair Corralation between PetroChina Company and TotalEnergies
Assuming the 90 days horizon PetroChina Company Limited is expected to generate 3.13 times more return on investment than TotalEnergies. However, PetroChina Company is 3.13 times more volatile than TotalEnergies SE. It trades about 0.11 of its potential returns per unit of risk. TotalEnergies SE is currently generating about 0.01 per unit of risk. If you would invest 8.92 in PetroChina Company Limited on September 3, 2024 and sell it today you would earn a total of 58.08 from holding PetroChina Company Limited or generate 651.12% 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. TotalEnergies SE
Performance |
| Timeline |
| PetroChina Limited |
| TotalEnergies SE |
PetroChina Company and TotalEnergies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PetroChina Company and TotalEnergies
The main advantage of trading using opposite PetroChina Company and TotalEnergies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroChina Company position performs unexpectedly, TotalEnergies 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 TotalEnergies will offset losses from the drop in TotalEnergies' long position.| PetroChina Company vs. Benchmark Electronics | PetroChina Company vs. Penn National Gaming | PetroChina Company vs. LPKF Laser Electronics | PetroChina Company vs. GAMESTOP |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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