Correlation Between Binasat Communications and Petronas Chemicals
Can any of the company-specific risk be diversified away by investing in both Binasat Communications and Petronas Chemicals 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 Binasat Communications and Petronas Chemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Binasat Communications Bhd and Petronas Chemicals Group, you can compare the effects of market volatilities on Binasat Communications and Petronas Chemicals 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 Binasat Communications with a short position of Petronas Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binasat Communications and Petronas Chemicals.
Diversification Opportunities for Binasat Communications and Petronas Chemicals
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Binasat and Petronas is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Binasat Communications Bhd and Petronas Chemicals Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petronas Chemicals and Binasat Communications 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 Binasat Communications Bhd are associated (or correlated) with Petronas Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petronas Chemicals has no effect on the direction of Binasat Communications i.e., Binasat Communications and Petronas Chemicals go up and down completely randomly.
Pair Corralation between Binasat Communications and Petronas Chemicals
Assuming the 90 days trading horizon Binasat Communications Bhd is expected to under-perform the Petronas Chemicals. But the stock apears to be less risky and, when comparing its historical volatility, Binasat Communications Bhd is 1.1 times less risky than Petronas Chemicals. The stock trades about -0.41 of its potential returns per unit of risk. The Petronas Chemicals Group is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 470.00 in Petronas Chemicals Group on October 24, 2024 and sell it today you would lose (1.00) from holding Petronas Chemicals Group or give up 0.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Binasat Communications Bhd vs. Petronas Chemicals Group
Performance |
| Timeline |
| Binasat Communications |
| Petronas Chemicals |
Binasat Communications and Petronas Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binasat Communications and Petronas Chemicals
The main advantage of trading using opposite Binasat Communications and Petronas Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binasat Communications position performs unexpectedly, Petronas Chemicals 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 Chemicals will offset losses from the drop in Petronas Chemicals' long position.| Binasat Communications vs. Magni Tech Industries | Binasat Communications vs. Aurelius Technologies Bhd | Binasat Communications vs. Press Metal Bhd | Binasat Communications vs. IHH Healthcare Bhd |
| Petronas Chemicals vs. Lyc Healthcare Bhd | Petronas Chemicals vs. KPJ Healthcare Bhd | Petronas Chemicals vs. Binasat Communications Bhd | Petronas Chemicals vs. Uchi Technologies 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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