Correlation Between Duopharma Biotech and Petronas Chemicals
Can any of the company-specific risk be diversified away by investing in both Duopharma Biotech 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 Duopharma Biotech and Petronas Chemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Duopharma Biotech Bhd and Petronas Chemicals Group, you can compare the effects of market volatilities on Duopharma Biotech 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 Duopharma Biotech with a short position of Petronas Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duopharma Biotech and Petronas Chemicals.
Diversification Opportunities for Duopharma Biotech and Petronas Chemicals
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Duopharma and Petronas is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Duopharma Biotech 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 Duopharma Biotech 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 Duopharma Biotech 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 Duopharma Biotech i.e., Duopharma Biotech and Petronas Chemicals go up and down completely randomly.
Pair Corralation between Duopharma Biotech and Petronas Chemicals
Assuming the 90 days trading horizon Duopharma Biotech Bhd is expected to generate 0.76 times more return on investment than Petronas Chemicals. However, Duopharma Biotech Bhd is 1.31 times less risky than Petronas Chemicals. It trades about 0.02 of its potential returns per unit of risk. Petronas Chemicals Group is currently generating about -0.13 per unit of risk. If you would invest 121.00 in Duopharma Biotech Bhd on September 1, 2024 and sell it today you would earn a total of 2.00 from holding Duopharma Biotech Bhd or generate 1.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Duopharma Biotech Bhd vs. Petronas Chemicals Group
Performance |
| Timeline |
| Duopharma Biotech Bhd |
| Petronas Chemicals |
Duopharma Biotech and Petronas Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Duopharma Biotech and Petronas Chemicals
The main advantage of trading using opposite Duopharma Biotech and Petronas Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duopharma Biotech 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.| Duopharma Biotech vs. Digistar Bhd | Duopharma Biotech vs. Minetech Resources Bhd | Duopharma Biotech vs. Swift Haulage Bhd | Duopharma Biotech vs. Bina Darulaman Bhd |
| Petronas Chemicals vs. Choo Bee Metal | Petronas Chemicals vs. Melewar Industrial Group | Petronas Chemicals vs. Al Aqar Healthcare | Petronas Chemicals vs. K One Technology 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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