Correlation Between PetroChina and EmbedWay TechCorp
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By analyzing existing cross correlation between PetroChina Co Ltd and EmbedWay TechCorp, you can compare the effects of market volatilities on PetroChina and EmbedWay TechCorp 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 EmbedWay TechCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroChina and EmbedWay TechCorp.
Diversification Opportunities for PetroChina and EmbedWay TechCorp
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PetroChina and EmbedWay is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding PetroChina Co Ltd and EmbedWay TechCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EmbedWay TechCorp 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 EmbedWay TechCorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EmbedWay TechCorp has no effect on the direction of PetroChina i.e., PetroChina and EmbedWay TechCorp go up and down completely randomly.
Pair Corralation between PetroChina and EmbedWay TechCorp
Assuming the 90 days trading horizon PetroChina is expected to generate 1.51 times less return on investment than EmbedWay TechCorp. But when comparing it to its historical volatility, PetroChina Co Ltd is 1.99 times less risky than EmbedWay TechCorp. It trades about 0.07 of its potential returns per unit of risk. EmbedWay TechCorp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,254 in EmbedWay TechCorp on October 9, 2024 and sell it today you would earn a total of 1,138 from holding EmbedWay TechCorp or generate 90.75% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
PetroChina Co Ltd vs. EmbedWay TechCorp
Performance |
Timeline |
PetroChina |
EmbedWay TechCorp |
PetroChina and EmbedWay TechCorp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PetroChina and EmbedWay TechCorp
The main advantage of trading using opposite PetroChina and EmbedWay TechCorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroChina position performs unexpectedly, EmbedWay TechCorp 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 EmbedWay TechCorp will offset losses from the drop in EmbedWay TechCorp's long position.PetroChina vs. Shandong Longquan Pipeline | PetroChina vs. Everdisplay Optronics Shanghai | PetroChina vs. Beijing Kingsoft Office | PetroChina vs. XinJiang GuoTong Pipeline |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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