Correlation Between Sapura Industrial and Petronas Gas
Can any of the company-specific risk be diversified away by investing in both Sapura Industrial 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 Sapura Industrial and Petronas Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sapura Industrial Bhd and Petronas Gas Bhd, you can compare the effects of market volatilities on Sapura Industrial 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 Sapura Industrial with a short position of Petronas Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sapura Industrial and Petronas Gas.
Diversification Opportunities for Sapura Industrial and Petronas Gas
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sapura and Petronas is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Sapura Industrial Bhd 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 Sapura Industrial 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 Sapura Industrial Bhd 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 Sapura Industrial i.e., Sapura Industrial and Petronas Gas go up and down completely randomly.
Pair Corralation between Sapura Industrial and Petronas Gas
Assuming the 90 days trading horizon Sapura Industrial Bhd is expected to under-perform the Petronas Gas. In addition to that, Sapura Industrial is 3.9 times more volatile than Petronas Gas Bhd. It trades about 0.0 of its total potential returns per unit of risk. Petronas Gas Bhd is currently generating about 0.1 per unit of volatility. If you would invest 1,752 in Petronas Gas Bhd on October 9, 2024 and sell it today you would earn a total of 26.00 from holding Petronas Gas Bhd or generate 1.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sapura Industrial Bhd vs. Petronas Gas Bhd
Performance |
| Timeline |
| Sapura Industrial Bhd |
| Petronas Gas Bhd |
Sapura Industrial and Petronas Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sapura Industrial and Petronas Gas
The main advantage of trading using opposite Sapura Industrial and Petronas Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sapura Industrial 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.| Sapura Industrial vs. Al Aqar Healthcare | Sapura Industrial vs. Oriental Food Industries | Sapura Industrial vs. Apollo Food Holdings | Sapura Industrial vs. Riverview Rubber Estates |
| Petronas Gas vs. Kossan Rubber Industries | Petronas Gas vs. Oriental Food Industries | Petronas Gas vs. Apollo Food Holdings | Petronas Gas vs. BP Plastics Holding |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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