Correlation Between Petronas Chemicals and Sports Toto
Can any of the company-specific risk be diversified away by investing in both Petronas Chemicals and Sports Toto 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 Sports Toto 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 Sports Toto Berhad, you can compare the effects of market volatilities on Petronas Chemicals and Sports Toto 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 Sports Toto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petronas Chemicals and Sports Toto.
Diversification Opportunities for Petronas Chemicals and Sports Toto
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Petronas and Sports is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Petronas Chemicals Group and Sports Toto Berhad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sports Toto Berhad 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 Sports Toto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sports Toto Berhad has no effect on the direction of Petronas Chemicals i.e., Petronas Chemicals and Sports Toto go up and down completely randomly.
Pair Corralation between Petronas Chemicals and Sports Toto
Assuming the 90 days trading horizon Petronas Chemicals is expected to generate 35.64 times less return on investment than Sports Toto. In addition to that, Petronas Chemicals is 2.47 times more volatile than Sports Toto Berhad. It trades about 0.01 of its total potential returns per unit of risk. Sports Toto Berhad is currently generating about 0.46 per unit of volatility. If you would invest 146.00 in Sports Toto Berhad on October 24, 2024 and sell it today you would earn a total of 12.00 from holding Sports Toto Berhad or generate 8.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Petronas Chemicals Group vs. Sports Toto Berhad
Performance |
| Timeline |
| Petronas Chemicals |
| Sports Toto Berhad |
Petronas Chemicals and Sports Toto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petronas Chemicals and Sports Toto
The main advantage of trading using opposite Petronas Chemicals and Sports Toto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petronas Chemicals position performs unexpectedly, Sports Toto 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 Sports Toto will offset losses from the drop in Sports Toto's long position.| Petronas Chemicals vs. Lyc Healthcare Bhd | Petronas Chemicals vs. KPJ Healthcare Bhd | Petronas Chemicals vs. Binasat Communications Bhd | Petronas Chemicals vs. Uchi Technologies Bhd |
| Sports Toto vs. YX Precious Metals | Sports Toto vs. ONETECH SOLUTIONS HOLDINGS | Sports Toto vs. MI Technovation Bhd | Sports Toto vs. Alliance Financial Group |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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