Correlation Between Petronas Gas and UNIQUE

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

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

Diversification Opportunities for Petronas Gas and UNIQUE

-0.03

Correlation Coefficient

Petronas Gas  UNIQUE

Good diversification

The 3 months correlation between Petronas and UNIQUE is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Petronas Gas Bhd and UNIQUE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNIQUE and Petronas Gas 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 Gas Bhd are associated (or correlated) with UNIQUE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNIQUE has no effect on the direction of Petronas Gas i.e., Petronas Gas and UNIQUE go up and down completely randomly.

Pair Corralation between Petronas Gas and UNIQUE

Assuming the 90 days trading horizon Petronas Gas is expected to generate 3.63 times less return on investment than UNIQUE. But when comparing it to its historical volatility, Petronas Gas Bhd is 2.65 times less risky than UNIQUE. It trades about 0.01 of its potential returns per unit of risk. UNIQUE is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  38.00  in UNIQUE on November 29, 2024 and sell it today you would earn a total of  0.00  from holding UNIQUE or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Petronas Gas Bhd  vs.  UNIQUE

Petronas Gas Bhd

Risk-Adjusted Performance

Very Weak

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

UNIQUE

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Petronas Gas and UNIQUE

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

The idea behind Petronas Gas Bhd and UNIQUE 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.