Correlation Between CICC Fund and PetroChina

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

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

Diversification Opportunities for CICC Fund and PetroChina

-0.2

Correlation Coefficient

CICC Fund  PetroChina

Good diversification

The 3 months correlation between CICC and PetroChina is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding CICC Fund Management and PetroChina Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetroChina and CICC Fund 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 CICC Fund Management 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 CICC Fund i.e., CICC Fund and PetroChina go up and down completely randomly.

Pair Corralation between CICC Fund and PetroChina

Assuming the 90 days trading horizon CICC Fund Management is expected to generate 0.47 times more return on investment than PetroChina. However, CICC Fund Management is 2.11 times less risky than PetroChina. It trades about 0.13 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  327.00  in CICC Fund Management on September 15, 2024 and sell it today you would earn a total of  25.00  from holding CICC Fund Management or generate 7.65% return on investment over 90 days.

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

CICC Fund Management  vs.  PetroChina Co Ltd

CICC Fund Management

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CICC Fund Management are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, CICC Fund may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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 CICC Fund and PetroChina

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

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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.