Correlation Between Techfast Holdings and Petronas Gas
Can any of the company-specific risk be diversified away by investing in both Techfast Holdings 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 Techfast Holdings and Petronas Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Techfast Holdings Bhd and Petronas Gas Bhd, you can compare the effects of market volatilities on Techfast Holdings 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 Techfast Holdings with a short position of Petronas Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Techfast Holdings and Petronas Gas.
Diversification Opportunities for Techfast Holdings and Petronas Gas
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Techfast and Petronas is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Techfast Holdings 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 Techfast Holdings 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 Techfast Holdings 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 Techfast Holdings i.e., Techfast Holdings and Petronas Gas go up and down completely randomly.
Pair Corralation between Techfast Holdings and Petronas Gas
Assuming the 90 days trading horizon Techfast Holdings Bhd is expected to under-perform the Petronas Gas. In addition to that, Techfast Holdings is 8.15 times more volatile than Petronas Gas Bhd. It trades about -0.01 of its total potential returns per unit of risk. Petronas Gas Bhd is currently generating about 0.03 per unit of volatility. If you would invest 1,575 in Petronas Gas Bhd on November 1, 2024 and sell it today you would earn a total of 137.00 from holding Petronas Gas Bhd or generate 8.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Techfast Holdings Bhd vs. Petronas Gas Bhd
Performance |
| Timeline |
| Techfast Holdings Bhd |
| Petronas Gas Bhd |
Techfast Holdings and Petronas Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Techfast Holdings and Petronas Gas
The main advantage of trading using opposite Techfast Holdings and Petronas Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Techfast Holdings 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.| Techfast Holdings vs. Malaysia Steel Works | Techfast Holdings vs. Steel Hawk Berhad | Techfast Holdings vs. Homeritz Bhd | Techfast Holdings vs. Sunway Construction Group |
| 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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