Correlation Between Petronas Chemicals and Public Bank
Can any of the company-specific risk be diversified away by investing in both Petronas Chemicals and Public Bank 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 Public Bank 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 Public Bank Bhd, you can compare the effects of market volatilities on Petronas Chemicals and Public Bank 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 Public Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petronas Chemicals and Public Bank.
Diversification Opportunities for Petronas Chemicals and Public Bank
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Petronas and Public is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Petronas Chemicals Group and Public Bank Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Bank 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 Public Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Public Bank Bhd has no effect on the direction of Petronas Chemicals i.e., Petronas Chemicals and Public Bank go up and down completely randomly.
Pair Corralation between Petronas Chemicals and Public Bank
Assuming the 90 days trading horizon Petronas Chemicals Group is expected to under-perform the Public Bank. In addition to that, Petronas Chemicals is 1.81 times more volatile than Public Bank Bhd. It trades about -0.08 of its total potential returns per unit of risk. Public Bank Bhd is currently generating about -0.06 per unit of volatility. If you would invest 470.00 in Public Bank Bhd on November 2, 2024 and sell it today you would lose (33.00) from holding Public Bank Bhd or give up 7.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Petronas Chemicals Group vs. Public Bank Bhd
Performance |
| Timeline |
| Petronas Chemicals |
| Public Bank Bhd |
Petronas Chemicals and Public Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petronas Chemicals and Public Bank
The main advantage of trading using opposite Petronas Chemicals and Public Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petronas Chemicals position performs unexpectedly, Public Bank 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 Public Bank will offset losses from the drop in Public Bank's long position.| Petronas Chemicals vs. Diversified Gateway Solutions | Petronas Chemicals vs. Dataprep Holdings Bhd | Petronas Chemicals vs. IHH Healthcare Bhd | Petronas Chemicals vs. Kluang Rubber |
| Public Bank vs. Malayan Banking Bhd | Public Bank vs. Hong Leong Bank | Public Bank vs. RHB Bank Bhd | Public Bank vs. Nexgram Holdings 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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