Correlation Between Uchi Technologies and Petronas Chemicals
Can any of the company-specific risk be diversified away by investing in both Uchi Technologies 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 Uchi Technologies and Petronas Chemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uchi Technologies Bhd and Petronas Chemicals Group, you can compare the effects of market volatilities on Uchi Technologies 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 Uchi Technologies with a short position of Petronas Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uchi Technologies and Petronas Chemicals.
Diversification Opportunities for Uchi Technologies and Petronas Chemicals
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Uchi and Petronas is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Uchi Technologies 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 Uchi Technologies 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 Uchi Technologies 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 Uchi Technologies i.e., Uchi Technologies and Petronas Chemicals go up and down completely randomly.
Pair Corralation between Uchi Technologies and Petronas Chemicals
Assuming the 90 days trading horizon Uchi Technologies Bhd is expected to generate 0.54 times more return on investment than Petronas Chemicals. However, Uchi Technologies Bhd is 1.85 times less risky than Petronas Chemicals. It trades about -0.05 of its potential returns per unit of risk. Petronas Chemicals Group is currently generating about -0.16 per unit of risk. If you would invest 390.00 in Uchi Technologies Bhd on November 3, 2024 and sell it today you would lose (3.00) from holding Uchi Technologies Bhd or give up 0.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Uchi Technologies Bhd vs. Petronas Chemicals Group
Performance |
| Timeline |
| Uchi Technologies Bhd |
| Petronas Chemicals |
Uchi Technologies and Petronas Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Uchi Technologies and Petronas Chemicals
The main advantage of trading using opposite Uchi Technologies and Petronas Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uchi Technologies 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.| Uchi Technologies vs. Southern Steel Bhd | Uchi Technologies vs. Public Packages Holdings | Uchi Technologies vs. Central Industrial Corp | Uchi Technologies vs. Senheng New Retail |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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