Correlation Between PetroChina and Shijiazhuang Tonhe
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By analyzing existing cross correlation between PetroChina Co Ltd and Shijiazhuang Tonhe Electronics, you can compare the effects of market volatilities on PetroChina and Shijiazhuang Tonhe 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 Shijiazhuang Tonhe. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroChina and Shijiazhuang Tonhe.
Diversification Opportunities for PetroChina and Shijiazhuang Tonhe
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PetroChina and Shijiazhuang is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding PetroChina Co Ltd and Shijiazhuang Tonhe Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shijiazhuang Tonhe 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 Shijiazhuang Tonhe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shijiazhuang Tonhe has no effect on the direction of PetroChina i.e., PetroChina and Shijiazhuang Tonhe go up and down completely randomly.
Pair Corralation between PetroChina and Shijiazhuang Tonhe
Assuming the 90 days trading horizon PetroChina is expected to generate 8.04 times less return on investment than Shijiazhuang Tonhe. But when comparing it to its historical volatility, PetroChina Co Ltd is 1.9 times less risky than Shijiazhuang Tonhe. It trades about 0.03 of its potential returns per unit of risk. Shijiazhuang Tonhe Electronics is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,364 in Shijiazhuang Tonhe Electronics on September 25, 2024 and sell it today you would earn a total of 353.00 from holding Shijiazhuang Tonhe Electronics or generate 25.88% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
PetroChina Co Ltd vs. Shijiazhuang Tonhe Electronics
Performance |
Timeline |
PetroChina |
Shijiazhuang Tonhe |
PetroChina and Shijiazhuang Tonhe Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PetroChina and Shijiazhuang Tonhe
The main advantage of trading using opposite PetroChina and Shijiazhuang Tonhe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroChina position performs unexpectedly, Shijiazhuang Tonhe 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 Shijiazhuang Tonhe will offset losses from the drop in Shijiazhuang Tonhe's long position.PetroChina vs. Xinjiang Baodi Mining | PetroChina vs. Guocheng Mining Co | PetroChina vs. Huaibei Mining Holdings | PetroChina vs. Fujian Oriental Silver |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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