Correlation Between Datasonic Group and Petronas Chemicals
Can any of the company-specific risk be diversified away by investing in both Datasonic Group and Petronas Chemicals 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 Datasonic Group and Petronas Chemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Datasonic Group Bhd and Petronas Chemicals Group, you can compare the effects of market volatilities on Datasonic Group and Petronas Chemicals 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 Datasonic Group with a short position of Petronas Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Datasonic Group and Petronas Chemicals.
Diversification Opportunities for Datasonic Group and Petronas Chemicals
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Datasonic and Petronas is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Datasonic Group Bhd and Petronas Chemicals Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petronas Chemicals and Datasonic Group 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 Datasonic Group Bhd are associated (or correlated) with Petronas Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petronas Chemicals has no effect on the direction of Datasonic Group i.e., Datasonic Group and Petronas Chemicals go up and down completely randomly.
Pair Corralation between Datasonic Group and Petronas Chemicals
Assuming the 90 days trading horizon Datasonic Group Bhd is expected to generate 1.18 times more return on investment than Petronas Chemicals. However, Datasonic Group is 1.18 times more volatile than Petronas Chemicals Group. It trades about 0.01 of its potential returns per unit of risk. Petronas Chemicals Group is currently generating about -0.09 per unit of risk. If you would invest 40.00 in Datasonic Group Bhd on September 4, 2024 and sell it today you would earn a total of 1.00 from holding Datasonic Group Bhd or generate 2.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Datasonic Group Bhd vs. Petronas Chemicals Group
Performance |
| Timeline |
| Datasonic Group Bhd |
| Petronas Chemicals |
Datasonic Group and Petronas Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Datasonic Group and Petronas Chemicals
The main advantage of trading using opposite Datasonic Group and Petronas Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Datasonic Group position performs unexpectedly, Petronas Chemicals 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 Petronas Chemicals will offset losses from the drop in Petronas Chemicals' long position.| Datasonic Group vs. Supercomnet Technologies Bhd | Datasonic Group vs. PIE Industrial Bhd | Datasonic Group vs. MClean Technologies Bhd | Datasonic Group vs. CB Industrial Product |
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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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