Correlation Between Petronas Chemicals and JF Technology
Can any of the company-specific risk be diversified away by investing in both Petronas Chemicals and JF Technology 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 Petronas Chemicals and JF Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Petronas Chemicals Group and JF Technology BHD, you can compare the effects of market volatilities on Petronas Chemicals and JF Technology 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 Petronas Chemicals with a short position of JF Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petronas Chemicals and JF Technology.
Diversification Opportunities for Petronas Chemicals and JF Technology
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Petronas and 0146 is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Petronas Chemicals Group and JF Technology BHD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JF Technology BHD and Petronas Chemicals 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 Petronas Chemicals Group are associated (or correlated) with JF Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JF Technology BHD has no effect on the direction of Petronas Chemicals i.e., Petronas Chemicals and JF Technology go up and down completely randomly.
Pair Corralation between Petronas Chemicals and JF Technology
Assuming the 90 days trading horizon Petronas Chemicals Group is expected to generate 0.87 times more return on investment than JF Technology. However, Petronas Chemicals Group is 1.15 times less risky than JF Technology. It trades about 0.03 of its potential returns per unit of risk. JF Technology BHD is currently generating about -0.32 per unit of risk. If you would invest 470.00 in Petronas Chemicals Group on October 23, 2024 and sell it today you would earn a total of 4.00 from holding Petronas Chemicals Group or generate 0.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Petronas Chemicals Group vs. JF Technology BHD
Performance |
| Timeline |
| Petronas Chemicals |
| JF Technology BHD |
Petronas Chemicals and JF Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petronas Chemicals and JF Technology
The main advantage of trading using opposite Petronas Chemicals and JF Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petronas Chemicals position performs unexpectedly, JF Technology 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 JF Technology will offset losses from the drop in JF Technology's long position.| Petronas Chemicals vs. YX Precious Metals | Petronas Chemicals vs. Homeritz Bhd | Petronas Chemicals vs. Leader Steel Holdings | Petronas Chemicals vs. British American Tobacco |
| JF Technology vs. Binasat Communications Bhd | JF Technology vs. Rubberex M | JF Technology vs. Petronas Chemicals Group | JF Technology vs. Riverview Rubber Estates |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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