Correlation Between Lushang Property and PetroChina
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By analyzing existing cross correlation between Lushang Property Co and PetroChina Co Ltd, you can compare the effects of market volatilities on Lushang Property 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 Lushang Property with a short position of PetroChina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lushang Property and PetroChina.
Diversification Opportunities for Lushang Property and PetroChina
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lushang and PetroChina is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Lushang Property Co and PetroChina Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetroChina and Lushang Property 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 Lushang Property Co 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 Lushang Property i.e., Lushang Property and PetroChina go up and down completely randomly.
Pair Corralation between Lushang Property and PetroChina
Assuming the 90 days trading horizon Lushang Property Co is expected to generate 1.31 times more return on investment than PetroChina. However, Lushang Property is 1.31 times more volatile than PetroChina Co Ltd. It trades about 0.21 of its potential returns per unit of risk. PetroChina Co Ltd is currently generating about 0.14 per unit of risk. If you would invest 686.00 in Lushang Property Co on September 24, 2024 and sell it today you would earn a total of 53.00 from holding Lushang Property Co or generate 7.73% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Lushang Property Co vs. PetroChina Co Ltd
Performance |
Timeline |
Lushang Property |
PetroChina |
Lushang Property and PetroChina Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lushang Property and PetroChina
The main advantage of trading using opposite Lushang Property and PetroChina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lushang Property 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.Lushang Property vs. PetroChina Co Ltd | Lushang Property vs. China Mobile Limited | Lushang Property vs. CNOOC Limited | Lushang Property vs. Ping An Insurance |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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