Correlation Between Swift Haulage and Petronas Chemicals
Can any of the company-specific risk be diversified away by investing in both Swift Haulage 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 Swift Haulage and Petronas Chemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swift Haulage Bhd and Petronas Chemicals Group, you can compare the effects of market volatilities on Swift Haulage 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 Swift Haulage with a short position of Petronas Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swift Haulage and Petronas Chemicals.
Diversification Opportunities for Swift Haulage and Petronas Chemicals
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Swift and Petronas is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Swift Haulage 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 Swift Haulage 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 Swift Haulage 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 Swift Haulage i.e., Swift Haulage and Petronas Chemicals go up and down completely randomly.
Pair Corralation between Swift Haulage and Petronas Chemicals
Assuming the 90 days trading horizon Swift Haulage Bhd is expected to under-perform the Petronas Chemicals. But the stock apears to be less risky and, when comparing its historical volatility, Swift Haulage Bhd is 1.01 times less risky than Petronas Chemicals. The stock trades about -0.11 of its potential returns per unit of risk. The Petronas Chemicals Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 484.00 in Petronas Chemicals Group on September 12, 2024 and sell it today you would earn a total of 14.00 from holding Petronas Chemicals Group or generate 2.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Swift Haulage Bhd vs. Petronas Chemicals Group
Performance |
| Timeline |
| Swift Haulage Bhd |
| Petronas Chemicals |
Swift Haulage and Petronas Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swift Haulage and Petronas Chemicals
The main advantage of trading using opposite Swift Haulage and Petronas Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swift Haulage 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.| Swift Haulage vs. Senheng New Retail | Swift Haulage vs. Berjaya Food Bhd | Swift Haulage vs. Dufu Tech Corp | Swift Haulage vs. Awanbiru Technology Bhd |
| Petronas Chemicals vs. Lotte Chemical Titan | Petronas Chemicals vs. Ancom Berhad | Petronas Chemicals vs. Techbond Group 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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