Correlation Between Digistar Bhd and Petronas Gas
Can any of the company-specific risk be diversified away by investing in both Digistar Bhd and Petronas Gas 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 Digistar Bhd and Petronas Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digistar Bhd and Petronas Gas Bhd, you can compare the effects of market volatilities on Digistar Bhd and Petronas Gas 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 Digistar Bhd with a short position of Petronas Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digistar Bhd and Petronas Gas.
Diversification Opportunities for Digistar Bhd and Petronas Gas
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Digistar and Petronas is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Digistar Bhd and Petronas Gas Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petronas Gas Bhd and Digistar Bhd 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 Digistar Bhd are associated (or correlated) with Petronas Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petronas Gas Bhd has no effect on the direction of Digistar Bhd i.e., Digistar Bhd and Petronas Gas go up and down completely randomly.
Pair Corralation between Digistar Bhd and Petronas Gas
Assuming the 90 days trading horizon Digistar Bhd is expected to generate 7.72 times more return on investment than Petronas Gas. However, Digistar Bhd is 7.72 times more volatile than Petronas Gas Bhd. It trades about 0.01 of its potential returns per unit of risk. Petronas Gas Bhd is currently generating about 0.03 per unit of risk. If you would invest 9.00 in Digistar Bhd on November 1, 2024 and sell it today you would lose (3.50) from holding Digistar Bhd or give up 38.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digistar Bhd vs. Petronas Gas Bhd
Performance |
| Timeline |
| Digistar Bhd |
| Petronas Gas Bhd |
Digistar Bhd and Petronas Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digistar Bhd and Petronas Gas
The main advantage of trading using opposite Digistar Bhd and Petronas Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digistar Bhd position performs unexpectedly, Petronas Gas 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 Petronas Gas will offset losses from the drop in Petronas Gas' long position.| Digistar Bhd vs. Press Metal Bhd | Digistar Bhd vs. Sports Toto Berhad | Digistar Bhd vs. Cosmos Technology International | Digistar Bhd vs. Uchi Technologies Bhd |
| Petronas Gas vs. Nexgram Holdings Bhd | Petronas Gas vs. Techfast Holdings Bhd | Petronas Gas vs. Digistar Bhd | Petronas Gas vs. AirAsia X Bhd |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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