Correlation Between Petronas Gas and Boustead Heavy
Can any of the company-specific risk be diversified away by investing in both Petronas Gas and Boustead Heavy 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 Boustead Heavy 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 Boustead Heavy Industries, you can compare the effects of market volatilities on Petronas Gas and Boustead Heavy 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 Boustead Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petronas Gas and Boustead Heavy.
Diversification Opportunities for Petronas Gas and Boustead Heavy
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Petronas and Boustead is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Petronas Gas Bhd and Boustead Heavy Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boustead Heavy Industries 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 Boustead Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boustead Heavy Industries has no effect on the direction of Petronas Gas i.e., Petronas Gas and Boustead Heavy go up and down completely randomly.
Pair Corralation between Petronas Gas and Boustead Heavy
Assuming the 90 days trading horizon Petronas Gas Bhd is expected to generate 0.49 times more return on investment than Boustead Heavy. However, Petronas Gas Bhd is 2.06 times less risky than Boustead Heavy. It trades about 0.09 of its potential returns per unit of risk. Boustead Heavy Industries is currently generating about -0.16 per unit of risk. If you would invest 1,720 in Petronas Gas Bhd on November 28, 2024 and sell it today you would earn a total of 30.00 from holding Petronas Gas Bhd or generate 1.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Petronas Gas Bhd vs. Boustead Heavy Industries
Performance |
| Timeline |
| Petronas Gas Bhd |
| Boustead Heavy Industries |
Petronas Gas and Boustead Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petronas Gas and Boustead Heavy
The main advantage of trading using opposite Petronas Gas and Boustead Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petronas Gas position performs unexpectedly, Boustead Heavy 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 Boustead Heavy will offset losses from the drop in Boustead Heavy's long position.| Petronas Gas vs. Shangri La Hotels | Petronas Gas vs. K One Technology Bhd | Petronas Gas vs. Petronas Chemicals Group | Petronas Gas vs. Binasat Communications Bhd |
| Boustead Heavy vs. Cengild Medical Berhad | Boustead Heavy vs. Al Aqar Healthcare | Boustead Heavy vs. Southern Steel Bhd | Boustead Heavy vs. CSC Steel Holdings |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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