Correlation Between Choo Bee and Petronas Gas
Can any of the company-specific risk be diversified away by investing in both Choo Bee and Petronas Gas 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 Choo Bee and Petronas Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Choo Bee Metal and Petronas Gas Bhd, you can compare the effects of market volatilities on Choo Bee and Petronas Gas 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 Choo Bee with a short position of Petronas Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choo Bee and Petronas Gas.
Diversification Opportunities for Choo Bee and Petronas Gas
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Choo and Petronas is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Choo Bee Metal and Petronas Gas Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petronas Gas Bhd and Choo Bee 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 Choo Bee Metal are associated (or correlated) with Petronas Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petronas Gas Bhd has no effect on the direction of Choo Bee i.e., Choo Bee and Petronas Gas go up and down completely randomly.
Pair Corralation between Choo Bee and Petronas Gas
Assuming the 90 days trading horizon Choo Bee Metal is expected to under-perform the Petronas Gas. In addition to that, Choo Bee is 3.1 times more volatile than Petronas Gas Bhd. It trades about -0.07 of its total potential returns per unit of risk. Petronas Gas Bhd is currently generating about -0.02 per unit of volatility. If you would invest 1,746 in Petronas Gas Bhd on November 3, 2024 and sell it today you would lose (26.00) from holding Petronas Gas Bhd or give up 1.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Choo Bee Metal vs. Petronas Gas Bhd
Performance |
| Timeline |
| Choo Bee Metal |
| Petronas Gas Bhd |
Choo Bee and Petronas Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Choo Bee and Petronas Gas
The main advantage of trading using opposite Choo Bee and Petronas Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choo Bee position performs unexpectedly, Petronas Gas 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 Gas will offset losses from the drop in Petronas Gas' long position.| Choo Bee vs. Central Industrial Corp | Choo Bee vs. Dnonce Tech Bhd | Choo Bee vs. Radiant Globaltech Bhd | Choo Bee vs. YTL Hospitality REIT |
| Petronas Gas vs. Choo Bee Metal | Petronas Gas vs. Ho Hup Construction | Petronas Gas vs. Daya Materials Bhd | Petronas Gas vs. Kluang Rubber |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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