Correlation Between Petronas Gas and Bina Darulaman
Can any of the company-specific risk be diversified away by investing in both Petronas Gas and Bina Darulaman 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 Gas and Bina Darulaman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Petronas Gas Bhd and Bina Darulaman Bhd, you can compare the effects of market volatilities on Petronas Gas and Bina Darulaman 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 Gas with a short position of Bina Darulaman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petronas Gas and Bina Darulaman.
Diversification Opportunities for Petronas Gas and Bina Darulaman
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Petronas and Bina is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Petronas Gas Bhd and Bina Darulaman Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bina Darulaman Bhd and Petronas Gas 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 Gas Bhd are associated (or correlated) with Bina Darulaman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bina Darulaman Bhd has no effect on the direction of Petronas Gas i.e., Petronas Gas and Bina Darulaman go up and down completely randomly.
Pair Corralation between Petronas Gas and Bina Darulaman
Assuming the 90 days trading horizon Petronas Gas Bhd is expected to generate 0.19 times more return on investment than Bina Darulaman. However, Petronas Gas Bhd is 5.29 times less risky than Bina Darulaman. It trades about 0.27 of its potential returns per unit of risk. Bina Darulaman Bhd is currently generating about 0.01 per unit of risk. If you would invest 1,742 in Petronas Gas Bhd on September 2, 2024 and sell it today you would earn a total of 42.00 from holding Petronas Gas Bhd or generate 2.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Petronas Gas Bhd vs. Bina Darulaman Bhd
Performance |
| Timeline |
| Petronas Gas Bhd |
| Bina Darulaman Bhd |
Petronas Gas and Bina Darulaman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petronas Gas and Bina Darulaman
The main advantage of trading using opposite Petronas Gas and Bina Darulaman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petronas Gas position performs unexpectedly, Bina Darulaman 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 Bina Darulaman will offset losses from the drop in Bina Darulaman's long position.| Petronas Gas vs. Digistar Bhd | Petronas Gas vs. Minetech Resources Bhd | Petronas Gas vs. Swift Haulage Bhd | Petronas Gas vs. Insas Bhd |
| Bina Darulaman vs. Malayan Banking Bhd | Bina Darulaman vs. Public Bank Bhd | Bina Darulaman vs. Petronas Chemicals Group | Bina Darulaman vs. Tenaga Nasional 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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