Correlation Between Petronas Chemicals and Pentamaster Bhd

Can any of the company-specific risk be diversified away by investing in both Petronas Chemicals and Pentamaster Bhd 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 Chemicals and Pentamaster Bhd into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Petronas Chemicals Group and Pentamaster Bhd, you can compare the effects of market volatilities on Petronas Chemicals and Pentamaster Bhd 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 Chemicals with a short position of Pentamaster Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petronas Chemicals and Pentamaster Bhd.

Diversification Opportunities for Petronas Chemicals and Pentamaster Bhd

0.0

Correlation Coefficient

Petronas Chemicals  Pentamaster Bhd

Pay attention - limited upside

The 3 months correlation between Petronas and Pentamaster is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Petronas Chemicals Group and Pentamaster Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pentamaster Bhd and Petronas Chemicals 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 Chemicals Group are associated (or correlated) with Pentamaster Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pentamaster Bhd has no effect on the direction of Petronas Chemicals i.e., Petronas Chemicals and Pentamaster Bhd go up and down completely randomly.

Pair Corralation between Petronas Chemicals and Pentamaster Bhd

If you would invest (100.00) in Pentamaster Bhd on October 15, 2024 and sell it today you would earn a total of  100.00  from holding Pentamaster Bhd or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Petronas Chemicals Group  vs.  Pentamaster Bhd

Petronas Chemicals

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Petronas Chemicals Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pentamaster Bhd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pentamaster Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Pentamaster Bhd is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Petronas Chemicals and Pentamaster Bhd

The main advantage of trading using opposite Petronas Chemicals and Pentamaster Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petronas Chemicals position performs unexpectedly, Pentamaster Bhd 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 Pentamaster Bhd will offset losses from the drop in Pentamaster Bhd's long position.

The idea behind Petronas Chemicals Group and Pentamaster Bhd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.