Correlation Between PetroChina and Zhengping RoadBridge
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By analyzing existing cross correlation between PetroChina Co Ltd and Zhengping RoadBridge Constr, you can compare the effects of market volatilities on PetroChina and Zhengping RoadBridge 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 Zhengping RoadBridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroChina and Zhengping RoadBridge.
Diversification Opportunities for PetroChina and Zhengping RoadBridge
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PetroChina and Zhengping is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding PetroChina Co Ltd and Zhengping RoadBridge Constr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhengping RoadBridge 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 Zhengping RoadBridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhengping RoadBridge has no effect on the direction of PetroChina i.e., PetroChina and Zhengping RoadBridge go up and down completely randomly.
Pair Corralation between PetroChina and Zhengping RoadBridge
Assuming the 90 days trading horizon PetroChina is expected to generate 6.84 times less return on investment than Zhengping RoadBridge. But when comparing it to its historical volatility, PetroChina Co Ltd is 3.34 times less risky than Zhengping RoadBridge. It trades about 0.06 of its potential returns per unit of risk. Zhengping RoadBridge Constr is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 279.00 in Zhengping RoadBridge Constr on October 21, 2024 and sell it today you would earn a total of 86.00 from holding Zhengping RoadBridge Constr or generate 30.82% 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. Zhengping RoadBridge Constr
Performance |
Timeline |
PetroChina |
Zhengping RoadBridge |
PetroChina and Zhengping RoadBridge Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PetroChina and Zhengping RoadBridge
The main advantage of trading using opposite PetroChina and Zhengping RoadBridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroChina position performs unexpectedly, Zhengping RoadBridge 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 Zhengping RoadBridge will offset losses from the drop in Zhengping RoadBridge's long position.PetroChina vs. 360 Security Technology | PetroChina vs. Vontron Technology Co | PetroChina vs. Meinian Onehealth Healthcare | PetroChina vs. Jiugui Liquor Co |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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