Correlation Between OMV AG and PetroChina
Can any of the company-specific risk be diversified away by investing in both OMV AG and PetroChina at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining OMV AG and PetroChina into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OMV AG PK and PetroChina Co Ltd, you can compare the effects of market volatilities on OMV AG 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 OMV AG with a short position of PetroChina. Check out your portfolio center. Please also check ongoing floating volatility patterns of OMV AG and PetroChina.
Diversification Opportunities for OMV AG and PetroChina
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between OMV and PetroChina is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding OMV AG PK and PetroChina Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetroChina and OMV AG 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 OMV AG PK 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 OMV AG i.e., OMV AG and PetroChina go up and down completely randomly.
Pair Corralation between OMV AG and PetroChina
Assuming the 90 days horizon OMV AG PK is expected to generate 0.61 times more return on investment than PetroChina. However, OMV AG PK is 1.63 times less risky than PetroChina. It trades about 0.36 of its potential returns per unit of risk. PetroChina Co Ltd is currently generating about 0.06 per unit of risk. If you would invest 969.00 in OMV AG PK on December 29, 2024 and sell it today you would earn a total of 324.00 from holding OMV AG PK or generate 33.44% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
OMV AG PK vs. PetroChina Co Ltd
Performance |
Timeline |
OMV AG PK |
PetroChina |
OMV AG and PetroChina Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with OMV AG and PetroChina
The main advantage of trading using opposite OMV AG and PetroChina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OMV AG 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.The idea behind OMV AG PK and PetroChina Co Ltd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.PetroChina vs. Equinor ASA | PetroChina vs. Origin Energy Ltd | PetroChina vs. Shell PLC | PetroChina vs. Eni SpA ADR |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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