Correlation Between PetroChina and Chinese Universe
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By analyzing existing cross correlation between PetroChina Co Ltd and Chinese Universe Publishing, you can compare the effects of market volatilities on PetroChina and Chinese Universe 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 Chinese Universe. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroChina and Chinese Universe.
Diversification Opportunities for PetroChina and Chinese Universe
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PetroChina and Chinese is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding PetroChina Co Ltd and Chinese Universe Publishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chinese Universe Pub 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 Chinese Universe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chinese Universe Pub has no effect on the direction of PetroChina i.e., PetroChina and Chinese Universe go up and down completely randomly.
Pair Corralation between PetroChina and Chinese Universe
Assuming the 90 days trading horizon PetroChina Co Ltd is expected to generate 0.75 times more return on investment than Chinese Universe. However, PetroChina Co Ltd is 1.34 times less risky than Chinese Universe. It trades about 0.28 of its potential returns per unit of risk. Chinese Universe Publishing is currently generating about 0.15 per unit of risk. If you would invest 803.00 in PetroChina Co Ltd on September 25, 2024 and sell it today you would earn a total of 75.00 from holding PetroChina Co Ltd or generate 9.34% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
PetroChina Co Ltd vs. Chinese Universe Publishing
Performance |
Timeline |
PetroChina |
Chinese Universe Pub |
PetroChina and Chinese Universe Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PetroChina and Chinese Universe
The main advantage of trading using opposite PetroChina and Chinese Universe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroChina position performs unexpectedly, Chinese Universe 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 Chinese Universe will offset losses from the drop in Chinese Universe's long position.PetroChina vs. Xinjiang Baodi Mining | PetroChina vs. Guocheng Mining Co | PetroChina vs. Huaibei Mining Holdings | PetroChina vs. Fujian Oriental Silver |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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