Correlation Between Petronas Chemicals and Axiata Group
Can any of the company-specific risk be diversified away by investing in both Petronas Chemicals and Axiata Group 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 Axiata Group 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 Axiata Group Bhd, you can compare the effects of market volatilities on Petronas Chemicals and Axiata Group 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 Axiata Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petronas Chemicals and Axiata Group.
Diversification Opportunities for Petronas Chemicals and Axiata Group
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Petronas and Axiata is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Petronas Chemicals Group and Axiata Group Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axiata Group 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 Axiata Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axiata Group Bhd has no effect on the direction of Petronas Chemicals i.e., Petronas Chemicals and Axiata Group go up and down completely randomly.
Pair Corralation between Petronas Chemicals and Axiata Group
Assuming the 90 days trading horizon Petronas Chemicals Group is expected to under-perform the Axiata Group. In addition to that, Petronas Chemicals is 1.78 times more volatile than Axiata Group Bhd. It trades about -0.26 of its total potential returns per unit of risk. Axiata Group Bhd is currently generating about -0.01 per unit of volatility. If you would invest 234.00 in Axiata Group Bhd on August 27, 2024 and sell it today you would lose (1.00) from holding Axiata Group Bhd or give up 0.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Petronas Chemicals Group vs. Axiata Group Bhd
Performance |
| Timeline |
| Petronas Chemicals |
| Axiata Group Bhd |
Petronas Chemicals and Axiata Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petronas Chemicals and Axiata Group
The main advantage of trading using opposite Petronas Chemicals and Axiata Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petronas Chemicals position performs unexpectedly, Axiata Group 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 Axiata Group will offset losses from the drop in Axiata Group's long position.| Petronas Chemicals vs. Digistar Bhd | Petronas Chemicals vs. Minetech Resources Bhd | Petronas Chemicals vs. OpenSys M Bhd | Petronas Chemicals vs. Insas Bhd |
| Axiata Group vs. Digistar Bhd | Axiata Group vs. Minetech Resources Bhd | Axiata Group vs. OpenSys M Bhd | Axiata Group vs. Insas 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |