Correlation Between US Global and PETRONAS Gas
Can any of the company-specific risk be diversified away by investing in both US Global 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 US Global and PETRONAS Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Global Investors and PETRONAS Gas Berhad, you can compare the effects of market volatilities on US Global 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 US Global with a short position of PETRONAS Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Global and PETRONAS Gas.
Diversification Opportunities for US Global and PETRONAS Gas
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GROW and PETRONAS is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding US Global Investors and PETRONAS Gas Berhad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PETRONAS Gas Berhad and US Global 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 US Global Investors 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 Berhad has no effect on the direction of US Global i.e., US Global and PETRONAS Gas go up and down completely randomly.
Pair Corralation between US Global and PETRONAS Gas
Given the investment horizon of 90 days US Global Investors is expected to under-perform the PETRONAS Gas. In addition to that, US Global is 2.29 times more volatile than PETRONAS Gas Berhad. It trades about -0.04 of its total potential returns per unit of risk. PETRONAS Gas Berhad is currently generating about 0.13 per unit of volatility. If you would invest 384.00 in PETRONAS Gas Berhad on September 3, 2024 and sell it today you would earn a total of 16.00 from holding PETRONAS Gas Berhad or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
US Global Investors vs. PETRONAS Gas Berhad
Performance |
| Timeline |
| US Global Investors |
| PETRONAS Gas Berhad |
US Global and PETRONAS Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Global and PETRONAS Gas
The main advantage of trading using opposite US Global and PETRONAS Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Global 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.| US Global vs. Gladstone Investment | US Global vs. PennantPark Floating Rate | US Global vs. Horizon Technology Finance | US Global vs. Stellus Capital Investment |
| PETRONAS Gas vs. US Global Investors | PETRONAS Gas vs. Alvotech | PETRONAS Gas vs. Xponential Fitness | PETRONAS Gas vs. Valneva SE ADR |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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