Correlation Between CNOOC and China Fortune
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By analyzing existing cross correlation between CNOOC Limited and China Fortune Land, you can compare the effects of market volatilities on CNOOC and China Fortune 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 CNOOC with a short position of China Fortune. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNOOC and China Fortune.
Diversification Opportunities for CNOOC and China Fortune
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between CNOOC and China is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding CNOOC Limited and China Fortune Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Fortune Land and CNOOC 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 CNOOC Limited are associated (or correlated) with China Fortune. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Fortune Land has no effect on the direction of CNOOC i.e., CNOOC and China Fortune go up and down completely randomly.
Pair Corralation between CNOOC and China Fortune
Assuming the 90 days trading horizon CNOOC is expected to generate 71.91 times less return on investment than China Fortune. But when comparing it to its historical volatility, CNOOC Limited is 3.25 times less risky than China Fortune. It trades about 0.01 of its potential returns per unit of risk. China Fortune Land is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 110.00 in China Fortune Land on September 24, 2024 and sell it today you would earn a total of 201.00 from holding China Fortune Land or generate 182.73% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
CNOOC Limited vs. China Fortune Land
Performance |
Timeline |
CNOOC Limited |
China Fortune Land |
CNOOC and China Fortune Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CNOOC and China Fortune
The main advantage of trading using opposite CNOOC and China Fortune positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNOOC position performs unexpectedly, China Fortune 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 China Fortune will offset losses from the drop in China Fortune's long position.CNOOC vs. Hangzhou Weiguang Electronic | CNOOC vs. Shijiazhuang Tonhe Electronics | CNOOC vs. Xinya Electronic Co | CNOOC vs. LianChuang Electronic Technology |
China Fortune vs. PetroChina Co Ltd | China Fortune vs. China Mobile Limited | China Fortune vs. CNOOC Limited | China Fortune vs. Ping An Insurance |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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