Correlation Between Maccura Biotechnology and PetroChina

Can any of the company-specific risk be diversified away by investing in both Maccura Biotechnology 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 Maccura Biotechnology and PetroChina into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Maccura Biotechnology Co and PetroChina Co Ltd, you can compare the effects of market volatilities on Maccura Biotechnology 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 Maccura Biotechnology with a short position of PetroChina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maccura Biotechnology and PetroChina.

Diversification Opportunities for Maccura Biotechnology and PetroChina

0.42

Correlation Coefficient

Maccura Biotechnology  PetroChina

Very weak diversification

The 3 months correlation between Maccura and PetroChina is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Maccura Biotechnology Co and PetroChina Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetroChina and Maccura Biotechnology 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 Maccura Biotechnology Co 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 Maccura Biotechnology i.e., Maccura Biotechnology and PetroChina go up and down completely randomly.

Pair Corralation between Maccura Biotechnology and PetroChina

Assuming the 90 days trading horizon Maccura Biotechnology Co is expected to generate 1.44 times more return on investment than PetroChina. However, Maccura Biotechnology is 1.44 times more volatile than PetroChina Co Ltd. It trades about 0.1 of its potential returns per unit of risk. PetroChina Co Ltd is currently generating about -0.07 per unit of risk. If you would invest  1,186  in Maccura Biotechnology Co on August 31, 2024 and sell it today you would earn a total of  217.00  from holding Maccura Biotechnology Co or generate 18.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.28%
Values	Daily Returns

Maccura Biotechnology Co  vs.  PetroChina Co Ltd

Maccura Biotechnology

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Maccura Biotechnology Co are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Maccura Biotechnology sustained solid returns over the last few months and may actually be approaching a breakup point.

PetroChina

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PetroChina Co Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Maccura Biotechnology and PetroChina

The main advantage of trading using opposite Maccura Biotechnology and PetroChina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maccura Biotechnology 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 Maccura Biotechnology Co 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.

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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.