Correlation Between Petronas Chemicals and Pesona Metro
Can any of the company-specific risk be diversified away by investing in both Petronas Chemicals and Pesona Metro 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 Pesona Metro 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 Pesona Metro Holdings, you can compare the effects of market volatilities on Petronas Chemicals and Pesona Metro 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 Pesona Metro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petronas Chemicals and Pesona Metro.
Diversification Opportunities for Petronas Chemicals and Pesona Metro
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Petronas and Pesona is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Petronas Chemicals Group and Pesona Metro Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pesona Metro Holdings 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 Pesona Metro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pesona Metro Holdings has no effect on the direction of Petronas Chemicals i.e., Petronas Chemicals and Pesona Metro go up and down completely randomly.
Pair Corralation between Petronas Chemicals and Pesona Metro
Assuming the 90 days trading horizon Petronas Chemicals is expected to generate 1.61 times less return on investment than Pesona Metro. But when comparing it to its historical volatility, Petronas Chemicals Group is 1.09 times less risky than Pesona Metro. It trades about 0.19 of its potential returns per unit of risk. Pesona Metro Holdings is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 24.00 in Pesona Metro Holdings on September 14, 2024 and sell it today you would earn a total of 4.00 from holding Pesona Metro Holdings or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Petronas Chemicals Group vs. Pesona Metro Holdings
Performance |
| Timeline |
| Petronas Chemicals |
| Pesona Metro Holdings |
Petronas Chemicals and Pesona Metro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petronas Chemicals and Pesona Metro
The main advantage of trading using opposite Petronas Chemicals and Pesona Metro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petronas Chemicals position performs unexpectedly, Pesona Metro 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 Pesona Metro will offset losses from the drop in Pesona Metro's long position.| Petronas Chemicals vs. ES Ceramics Technology | Petronas Chemicals vs. Supercomnet Technologies Bhd | Petronas Chemicals vs. Cloudpoint Technology Berhad | Petronas Chemicals vs. Media Prima Bhd |
| Pesona Metro vs. Oriental Food Industries | Pesona Metro vs. Sports Toto Berhad | Pesona Metro vs. Eonmetall Group Bhd | Pesona Metro vs. Star Media Group |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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