Correlation Between Petronas Chemicals and MyTech Group
Can any of the company-specific risk be diversified away by investing in both Petronas Chemicals and MyTech 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 MyTech 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 MyTech Group Bhd, you can compare the effects of market volatilities on Petronas Chemicals and MyTech 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 MyTech Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petronas Chemicals and MyTech Group.
Diversification Opportunities for Petronas Chemicals and MyTech Group
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Petronas and MyTech is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Petronas Chemicals Group and MyTech Group Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MyTech 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 MyTech Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MyTech Group Bhd has no effect on the direction of Petronas Chemicals i.e., Petronas Chemicals and MyTech Group go up and down completely randomly.
Pair Corralation between Petronas Chemicals and MyTech Group
Assuming the 90 days trading horizon Petronas Chemicals Group is expected to under-perform the MyTech Group. But the stock apears to be less risky and, when comparing its historical volatility, Petronas Chemicals Group is 1.84 times less risky than MyTech Group. The stock trades about -0.13 of its potential returns per unit of risk. The MyTech Group Bhd is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 55.00 in MyTech Group Bhd on September 1, 2024 and sell it today you would lose (17.00) from holding MyTech Group Bhd or give up 30.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Petronas Chemicals Group vs. MyTech Group Bhd
Performance |
| Timeline |
| Petronas Chemicals |
| MyTech Group Bhd |
Petronas Chemicals and MyTech Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petronas Chemicals and MyTech Group
The main advantage of trading using opposite Petronas Chemicals and MyTech Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petronas Chemicals position performs unexpectedly, MyTech 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 MyTech Group will offset losses from the drop in MyTech Group's long position.| Petronas Chemicals vs. Choo Bee Metal | Petronas Chemicals vs. Melewar Industrial Group | Petronas Chemicals vs. Al Aqar Healthcare | Petronas Chemicals vs. K One Technology Bhd |
| MyTech Group vs. Senheng New Retail | MyTech Group vs. Melewar Industrial Group | MyTech Group vs. Choo Bee Metal | MyTech Group vs. Silver Ridge Holdings |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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