Correlation Between Petronas Chemicals and Mr D
Can any of the company-specific risk be diversified away by investing in both Petronas Chemicals and Mr D 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 Mr D 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 Mr D I, you can compare the effects of market volatilities on Petronas Chemicals and Mr D 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 Mr D. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petronas Chemicals and Mr D.
Diversification Opportunities for Petronas Chemicals and Mr D
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Petronas and 5296 is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Petronas Chemicals Group and Mr D I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mr D I 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 Mr D. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mr D I has no effect on the direction of Petronas Chemicals i.e., Petronas Chemicals and Mr D go up and down completely randomly.
Pair Corralation between Petronas Chemicals and Mr D
Assuming the 90 days trading horizon Petronas Chemicals Group is expected to generate 0.99 times more return on investment than Mr D. However, Petronas Chemicals Group is 1.01 times less risky than Mr D. It trades about -0.08 of its potential returns per unit of risk. Mr D I is currently generating about -0.09 per unit of risk. If you would invest 560.00 in Petronas Chemicals Group on November 2, 2024 and sell it today you would lose (93.00) from holding Petronas Chemicals Group or give up 16.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Petronas Chemicals Group vs. Mr D I
Performance |
| Timeline |
| Petronas Chemicals |
| Mr D I |
Petronas Chemicals and Mr D Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petronas Chemicals and Mr D
The main advantage of trading using opposite Petronas Chemicals and Mr D positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petronas Chemicals position performs unexpectedly, Mr D 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 Mr D will offset losses from the drop in Mr D'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 |
| Mr D vs. Supercomnet Technologies Bhd | Mr D vs. PMB Technology Bhd | Mr D vs. MI Technovation Bhd | Mr D vs. Sports Toto Berhad |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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