Correlation Between Petronas Chemicals and YTL Hospitality
Can any of the company-specific risk be diversified away by investing in both Petronas Chemicals and YTL Hospitality 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 YTL Hospitality 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 YTL Hospitality REIT, you can compare the effects of market volatilities on Petronas Chemicals and YTL Hospitality 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 YTL Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petronas Chemicals and YTL Hospitality.
Diversification Opportunities for Petronas Chemicals and YTL Hospitality
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Petronas and YTL is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Petronas Chemicals Group and YTL Hospitality REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YTL Hospitality REIT 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 YTL Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YTL Hospitality REIT has no effect on the direction of Petronas Chemicals i.e., Petronas Chemicals and YTL Hospitality go up and down completely randomly.
Pair Corralation between Petronas Chemicals and YTL Hospitality
Assuming the 90 days trading horizon Petronas Chemicals Group is expected to under-perform the YTL Hospitality. In addition to that, Petronas Chemicals is 2.45 times more volatile than YTL Hospitality REIT. It trades about -0.08 of its total potential returns per unit of risk. YTL Hospitality REIT is currently generating about 0.0 per unit of volatility. If you would invest 118.00 in YTL Hospitality REIT on November 2, 2024 and sell it today you would earn a total of 0.00 from holding YTL Hospitality REIT or generate 0.0% 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. YTL Hospitality REIT
Performance |
| Timeline |
| Petronas Chemicals |
| YTL Hospitality REIT |
Petronas Chemicals and YTL Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petronas Chemicals and YTL Hospitality
The main advantage of trading using opposite Petronas Chemicals and YTL Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petronas Chemicals position performs unexpectedly, YTL Hospitality 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 YTL Hospitality will offset losses from the drop in YTL Hospitality'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 |
| YTL Hospitality vs. Senheng New Retail | YTL Hospitality vs. Sports Toto Berhad | YTL Hospitality vs. Uchi Technologies Bhd | YTL Hospitality vs. SFP Tech Holdings |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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