Correlation Between Petronas Chemicals and TAS Offshore
Can any of the company-specific risk be diversified away by investing in both Petronas Chemicals and TAS Offshore 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 TAS Offshore 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 TAS Offshore Bhd, you can compare the effects of market volatilities on Petronas Chemicals and TAS Offshore 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 TAS Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petronas Chemicals and TAS Offshore.
Diversification Opportunities for Petronas Chemicals and TAS Offshore
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Petronas and TAS is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Petronas Chemicals Group and TAS Offshore Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TAS Offshore 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 TAS Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TAS Offshore Bhd has no effect on the direction of Petronas Chemicals i.e., Petronas Chemicals and TAS Offshore go up and down completely randomly.
Pair Corralation between Petronas Chemicals and TAS Offshore
Assuming the 90 days trading horizon Petronas Chemicals Group is expected to under-perform the TAS Offshore. But the stock apears to be less risky and, when comparing its historical volatility, Petronas Chemicals Group is 1.17 times less risky than TAS Offshore. The stock trades about -0.16 of its potential returns per unit of risk. The TAS Offshore Bhd is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 64.00 in TAS Offshore Bhd on November 3, 2024 and sell it today you would earn a total of 4.00 from holding TAS Offshore Bhd or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Petronas Chemicals Group vs. TAS Offshore Bhd
Performance |
| Timeline |
| Petronas Chemicals |
| TAS Offshore Bhd |
Petronas Chemicals and TAS Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petronas Chemicals and TAS Offshore
The main advantage of trading using opposite Petronas Chemicals and TAS Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petronas Chemicals position performs unexpectedly, TAS Offshore 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 TAS Offshore will offset losses from the drop in TAS Offshore's long position.| Petronas Chemicals vs. Public Bank Bhd | Petronas Chemicals vs. DC HEALTHCARE HOLDINGS | Petronas Chemicals vs. Al Aqar Healthcare | Petronas Chemicals vs. Computer Forms Bhd |
| TAS Offshore vs. Uchi Technologies Bhd | TAS Offshore vs. Tex Cycle Technology | TAS Offshore vs. Greatech Technology Bhd | TAS Offshore vs. YX Precious Metals |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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