Correlation Between PetroChina and MOL PLC
Can any of the company-specific risk be diversified away by investing in both PetroChina and MOL PLC 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 PetroChina and MOL PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PetroChina Co Ltd and MOL PLC ADR, you can compare the effects of market volatilities on PetroChina and MOL PLC 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 MOL PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroChina and MOL PLC.
Diversification Opportunities for PetroChina and MOL PLC
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PetroChina and MOL is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding PetroChina Co Ltd and MOL PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOL PLC ADR 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 MOL PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOL PLC ADR has no effect on the direction of PetroChina i.e., PetroChina and MOL PLC go up and down completely randomly.
Pair Corralation between PetroChina and MOL PLC
Assuming the 90 days horizon PetroChina Co Ltd is expected to generate 3.18 times more return on investment than MOL PLC. However, PetroChina is 3.18 times more volatile than MOL PLC ADR. It trades about 0.04 of its potential returns per unit of risk. MOL PLC ADR is currently generating about -0.08 per unit of risk. If you would invest 70.00 in PetroChina Co Ltd on September 16, 2024 and sell it today you would earn a total of 4.00 from holding PetroChina Co Ltd or generate 5.71% 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. MOL PLC ADR
Performance |
Timeline |
PetroChina |
MOL PLC ADR |
PetroChina and MOL PLC Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PetroChina and MOL PLC
The main advantage of trading using opposite PetroChina and MOL PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroChina position performs unexpectedly, MOL PLC 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 MOL PLC will offset losses from the drop in MOL PLC's long position.PetroChina vs. Equinor ASA | PetroChina vs. Origin Energy Ltd | PetroChina vs. Shell PLC | PetroChina vs. Eni SpA ADR |
MOL PLC vs. Equinor ASA ADR | MOL PLC vs. TotalEnergies SE ADR | MOL PLC vs. Ecopetrol SA ADR | MOL PLC vs. National Fuel Gas |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |