Correlation Between Petronas Chemicals and PGF Capital
Can any of the company-specific risk be diversified away by investing in both Petronas Chemicals and PGF Capital 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 PGF Capital 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 PGF Capital Bhd, you can compare the effects of market volatilities on Petronas Chemicals and PGF Capital 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 PGF Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petronas Chemicals and PGF Capital.
Diversification Opportunities for Petronas Chemicals and PGF Capital
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Petronas and PGF is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Petronas Chemicals Group and PGF Capital Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PGF Capital 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 PGF Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PGF Capital Bhd has no effect on the direction of Petronas Chemicals i.e., Petronas Chemicals and PGF Capital go up and down completely randomly.
Pair Corralation between Petronas Chemicals and PGF Capital
Assuming the 90 days trading horizon Petronas Chemicals Group is expected to under-perform the PGF Capital. In addition to that, Petronas Chemicals is 1.03 times more volatile than PGF Capital Bhd. It trades about -0.24 of its total potential returns per unit of risk. PGF Capital Bhd is currently generating about -0.04 per unit of volatility. If you would invest 221.00 in PGF Capital Bhd on September 1, 2024 and sell it today you would lose (7.00) from holding PGF Capital Bhd or give up 3.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Petronas Chemicals Group vs. PGF Capital Bhd
Performance |
| Timeline |
| Petronas Chemicals |
| PGF Capital Bhd |
Petronas Chemicals and PGF Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petronas Chemicals and PGF Capital
The main advantage of trading using opposite Petronas Chemicals and PGF Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petronas Chemicals position performs unexpectedly, PGF Capital 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 PGF Capital will offset losses from the drop in PGF Capital'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 |
| PGF Capital vs. EA Technique M | PGF Capital vs. PIE Industrial Bhd | PGF Capital vs. Cosmos Technology International | PGF Capital vs. Sunzen Biotech 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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