Correlation Between Uwc Bhd and Petronas Chemicals
Can any of the company-specific risk be diversified away by investing in both Uwc Bhd 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 Uwc Bhd and Petronas Chemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uwc Bhd and Petronas Chemicals Group, you can compare the effects of market volatilities on Uwc Bhd 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 Uwc Bhd with a short position of Petronas Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uwc Bhd and Petronas Chemicals.
Diversification Opportunities for Uwc Bhd and Petronas Chemicals
-0.92 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Uwc and Petronas is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding Uwc 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 Uwc Bhd 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 Uwc 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 Uwc Bhd i.e., Uwc Bhd and Petronas Chemicals go up and down completely randomly.
Pair Corralation between Uwc Bhd and Petronas Chemicals
Assuming the 90 days trading horizon Uwc Bhd is expected to generate 0.81 times more return on investment than Petronas Chemicals. However, Uwc Bhd is 1.24 times less risky than Petronas Chemicals. It trades about 0.14 of its potential returns per unit of risk. Petronas Chemicals Group is currently generating about 0.1 per unit of risk. If you would invest 265.00 in Uwc Bhd on September 18, 2024 and sell it today you would earn a total of 15.00 from holding Uwc Bhd or generate 5.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Uwc Bhd vs. Petronas Chemicals Group
Performance |
| Timeline |
| Uwc Bhd |
| Petronas Chemicals |
Uwc Bhd and Petronas Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Uwc Bhd and Petronas Chemicals
The main advantage of trading using opposite Uwc Bhd and Petronas Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uwc Bhd 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.The idea behind Uwc Bhd and Petronas Chemicals Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Petronas Chemicals vs. Hong Leong Bank | Petronas Chemicals vs. Alliance Financial Group | Petronas Chemicals vs. Uchi Technologies Bhd | Petronas Chemicals vs. Senheng New Retail |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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