Correlation Between Petronas Chemicals and MyNEWS Holdings
Can any of the company-specific risk be diversified away by investing in both Petronas Chemicals and MyNEWS Holdings 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 MyNEWS Holdings 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 myNEWS Holdings Bhd, you can compare the effects of market volatilities on Petronas Chemicals and MyNEWS Holdings 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 MyNEWS Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petronas Chemicals and MyNEWS Holdings.
Diversification Opportunities for Petronas Chemicals and MyNEWS Holdings
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Petronas and MyNEWS is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Petronas Chemicals Group and myNEWS Holdings Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on myNEWS Holdings 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 MyNEWS Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of myNEWS Holdings Bhd has no effect on the direction of Petronas Chemicals i.e., Petronas Chemicals and MyNEWS Holdings go up and down completely randomly.
Pair Corralation between Petronas Chemicals and MyNEWS Holdings
Assuming the 90 days trading horizon Petronas Chemicals Group is expected to under-perform the MyNEWS Holdings. In addition to that, Petronas Chemicals is 1.78 times more volatile than myNEWS Holdings Bhd. It trades about -0.24 of its total potential returns per unit of risk. myNEWS Holdings Bhd is currently generating about 0.26 per unit of volatility. If you would invest 61.00 in myNEWS Holdings Bhd on September 2, 2024 and sell it today you would earn a total of 5.00 from holding myNEWS Holdings Bhd or generate 8.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Petronas Chemicals Group vs. myNEWS Holdings Bhd
Performance |
| Timeline |
| Petronas Chemicals |
| myNEWS Holdings Bhd |
Petronas Chemicals and MyNEWS Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petronas Chemicals and MyNEWS Holdings
The main advantage of trading using opposite Petronas Chemicals and MyNEWS Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petronas Chemicals position performs unexpectedly, MyNEWS Holdings 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 MyNEWS Holdings will offset losses from the drop in MyNEWS Holdings' long position.The idea behind Petronas Chemicals Group and myNEWS Holdings Bhd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| MyNEWS Holdings vs. Eonmetall Group Bhd | MyNEWS Holdings vs. Binasat Communications Bhd | MyNEWS Holdings vs. Press Metal Bhd | MyNEWS Holdings vs. Berjaya Food 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 Stocks Directory module to find actively traded stocks across global markets.
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