Correlation Between Petronas Chemicals and KL Technology
Can any of the company-specific risk be diversified away by investing in both Petronas Chemicals and KL Technology 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 KL Technology 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 KL Technology, you can compare the effects of market volatilities on Petronas Chemicals and KL Technology 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 KL Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petronas Chemicals and KL Technology.
Diversification Opportunities for Petronas Chemicals and KL Technology
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Petronas and KLTE is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Petronas Chemicals Group and KL Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KL Technology 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 KL Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KL Technology has no effect on the direction of Petronas Chemicals i.e., Petronas Chemicals and KL Technology go up and down completely randomly.
Pair Corralation between Petronas Chemicals and KL Technology
Assuming the 90 days trading horizon Petronas Chemicals Group is expected to under-perform the KL Technology. In addition to that, Petronas Chemicals is 1.76 times more volatile than KL Technology. It trades about -0.02 of its total potential returns per unit of risk. KL Technology is currently generating about 0.08 per unit of volatility. If you would invest 5,911 in KL Technology on October 22, 2024 and sell it today you would earn a total of 218.00 from holding KL Technology or generate 3.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.62% |
| Values | Daily Returns |
Petronas Chemicals Group vs. KL Technology
Performance |
| Timeline |
Petronas Chemicals and KL Technology Volatility Contrast
Predicted Return Density |
| Returns |
Petronas Chemicals Group
Pair trading matchups for Petronas Chemicals
KL Technology
Pair trading matchups for KL Technology
Pair Trading with Petronas Chemicals and KL Technology
The main advantage of trading using opposite Petronas Chemicals and KL Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petronas Chemicals position performs unexpectedly, KL Technology 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 KL Technology will offset losses from the drop in KL Technology's long position.| Petronas Chemicals vs. Computer Forms Bhd | Petronas Chemicals vs. Rubberex M | Petronas Chemicals vs. Al Aqar Healthcare | Petronas Chemicals vs. BP Plastics Holding |
| KL Technology vs. Computer Forms Bhd | KL Technology vs. Choo Bee Metal | KL Technology vs. Greatech Technology Bhd | KL Technology vs. Southern Steel 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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