Correlation Between PetroChina and Shenzhen Overseas
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By analyzing existing cross correlation between PetroChina Co Ltd and Shenzhen Overseas Chinese, you can compare the effects of market volatilities on PetroChina and Shenzhen Overseas 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 with a short position of Shenzhen Overseas. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroChina and Shenzhen Overseas.
Diversification Opportunities for PetroChina and Shenzhen Overseas
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between PetroChina and Shenzhen is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding PetroChina Co Ltd and Shenzhen Overseas Chinese in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Overseas Chinese and PetroChina 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 Co Ltd are associated (or correlated) with Shenzhen Overseas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Overseas Chinese has no effect on the direction of PetroChina i.e., PetroChina and Shenzhen Overseas go up and down completely randomly.
Pair Corralation between PetroChina and Shenzhen Overseas
Assuming the 90 days trading horizon PetroChina Co Ltd is expected to generate 0.86 times more return on investment than Shenzhen Overseas. However, PetroChina Co Ltd is 1.16 times less risky than Shenzhen Overseas. It trades about 0.07 of its potential returns per unit of risk. Shenzhen Overseas Chinese is currently generating about -0.05 per unit of risk. If you would invest 485.00 in PetroChina Co Ltd on September 25, 2024 and sell it today you would earn a total of 373.00 from holding PetroChina Co Ltd or generate 76.91% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
PetroChina Co Ltd vs. Shenzhen Overseas Chinese
Performance |
Timeline |
PetroChina |
Shenzhen Overseas Chinese |
PetroChina and Shenzhen Overseas Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PetroChina and Shenzhen Overseas
The main advantage of trading using opposite PetroChina and Shenzhen Overseas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroChina position performs unexpectedly, Shenzhen Overseas 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 Shenzhen Overseas will offset losses from the drop in Shenzhen Overseas' long position.PetroChina vs. Xinjiang Baodi Mining | PetroChina vs. Guocheng Mining Co | PetroChina vs. Huaibei Mining Holdings | PetroChina vs. Fujian Oriental Silver |
Shenzhen Overseas vs. Bank of China | Shenzhen Overseas vs. Kweichow Moutai Co | Shenzhen Overseas vs. PetroChina Co Ltd | Shenzhen Overseas vs. Bank of Communications |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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