Correlation Between Cofoe Medical and PetroChina

Can any of the company-specific risk be diversified away by investing in both Cofoe Medical 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 Cofoe Medical and PetroChina into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cofoe Medical Technology and PetroChina Co Ltd, you can compare the effects of market volatilities on Cofoe Medical 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 Cofoe Medical with a short position of PetroChina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cofoe Medical and PetroChina.

Diversification Opportunities for Cofoe Medical and PetroChina

0.47

Correlation Coefficient

Cofoe Medical  PetroChina

Very weak diversification

The 3 months correlation between Cofoe and PetroChina is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Cofoe Medical Technology and PetroChina Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetroChina and Cofoe Medical 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 Cofoe Medical Technology 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 Cofoe Medical i.e., Cofoe Medical and PetroChina go up and down completely randomly.

Pair Corralation between Cofoe Medical and PetroChina

Assuming the 90 days trading horizon Cofoe Medical Technology is expected to generate 1.51 times more return on investment than PetroChina. However, Cofoe Medical is 1.51 times more volatile than PetroChina Co Ltd. It trades about 0.15 of its potential returns per unit of risk. PetroChina Co Ltd is currently generating about 0.05 per unit of risk. If you would invest  2,987  in Cofoe Medical Technology on September 15, 2024 and sell it today you would earn a total of  901.00  from holding Cofoe Medical Technology or generate 30.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Cofoe Medical Technology  vs.  PetroChina Co Ltd

Cofoe Medical Technology

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cofoe Medical Technology are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Cofoe Medical sustained solid returns over the last few months and may actually be approaching a breakup point.

PetroChina

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PetroChina Co Ltd are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, PetroChina may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Cofoe Medical and PetroChina

The main advantage of trading using opposite Cofoe Medical and PetroChina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cofoe Medical 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.

The idea behind Cofoe Medical Technology and PetroChina Co Ltd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.