Correlation Between Petronas Chemicals and CB Industrial
Can any of the company-specific risk be diversified away by investing in both Petronas Chemicals and CB Industrial 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 CB Industrial 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 CB Industrial Product, you can compare the effects of market volatilities on Petronas Chemicals and CB Industrial 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 CB Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petronas Chemicals and CB Industrial.
Diversification Opportunities for Petronas Chemicals and CB Industrial
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Petronas and 7076 is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Petronas Chemicals Group and CB Industrial Product in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CB Industrial Product 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 CB Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CB Industrial Product has no effect on the direction of Petronas Chemicals i.e., Petronas Chemicals and CB Industrial go up and down completely randomly.
Pair Corralation between Petronas Chemicals and CB Industrial
Assuming the 90 days trading horizon Petronas Chemicals Group is expected to under-perform the CB Industrial. In addition to that, Petronas Chemicals is 1.02 times more volatile than CB Industrial Product. It trades about -0.13 of its total potential returns per unit of risk. CB Industrial Product is currently generating about 0.0 per unit of volatility. If you would invest 134.00 in CB Industrial Product on September 3, 2024 and sell it today you would lose (3.00) from holding CB Industrial Product or give up 2.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Petronas Chemicals Group vs. CB Industrial Product
Performance |
| Timeline |
| Petronas Chemicals |
| CB Industrial Product |
Petronas Chemicals and CB Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petronas Chemicals and CB Industrial
The main advantage of trading using opposite Petronas Chemicals and CB Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petronas Chemicals position performs unexpectedly, CB Industrial 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 CB Industrial will offset losses from the drop in CB Industrial's long position.| Petronas Chemicals vs. ES Ceramics Technology | Petronas Chemicals vs. Minetech Resources Bhd | Petronas Chemicals vs. SFP Tech Holdings | Petronas Chemicals vs. Senheng New Retail |
| CB Industrial vs. Greatech Technology Bhd | CB Industrial vs. Genetec Technology Bhd | CB Industrial vs. PIE Industrial Bhd | CB Industrial vs. Dufu Tech Corp |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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