Correlation Between Heineken Bhd and Petronas Chemicals
Can any of the company-specific risk be diversified away by investing in both Heineken Bhd 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 Heineken Bhd and Petronas Chemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Heineken Bhd and Petronas Chemicals Group, you can compare the effects of market volatilities on Heineken Bhd 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 Heineken Bhd with a short position of Petronas Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heineken Bhd and Petronas Chemicals.
Diversification Opportunities for Heineken Bhd and Petronas Chemicals
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Heineken and Petronas is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Heineken 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 Heineken 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 Heineken 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 Heineken Bhd i.e., Heineken Bhd and Petronas Chemicals go up and down completely randomly.
Pair Corralation between Heineken Bhd and Petronas Chemicals
Assuming the 90 days trading horizon Heineken Bhd is expected to generate 3.75 times less return on investment than Petronas Chemicals. But when comparing it to its historical volatility, Heineken Bhd is 3.53 times less risky than Petronas Chemicals. It trades about 0.1 of its potential returns per unit of risk. Petronas Chemicals Group is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 455.00 in Petronas Chemicals Group on September 18, 2024 and sell it today you would earn a total of 23.00 from holding Petronas Chemicals Group or generate 5.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heineken Bhd vs. Petronas Chemicals Group
Performance |
| Timeline |
| Heineken Bhd |
| Petronas Chemicals |
Heineken Bhd and Petronas Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heineken Bhd and Petronas Chemicals
The main advantage of trading using opposite Heineken Bhd and Petronas Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heineken Bhd 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.| Heineken Bhd vs. Alliance Financial Group | Heineken Bhd vs. Sports Toto Berhad | Heineken Bhd vs. Homeritz Bhd | Heineken Bhd vs. CSC Steel Holdings |
| Petronas Chemicals vs. Hong Leong Bank | Petronas Chemicals vs. Alliance Financial Group | Petronas Chemicals vs. Uchi Technologies Bhd | Petronas Chemicals vs. Senheng New Retail |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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