Correlation Between Papaya Growth and PETRONAS Gas

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

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

Diversification Opportunities for Papaya Growth and PETRONAS Gas

0.0

Correlation Coefficient

Papaya Growth  PETRONAS Gas

Pay attention - limited upside

The 3 months correlation between Papaya and PETRONAS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Papaya Growth Opportunity 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 Papaya Growth 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 Papaya Growth Opportunity 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 Papaya Growth i.e., Papaya Growth and PETRONAS Gas go up and down completely randomly.

Pair Corralation between Papaya Growth and PETRONAS Gas

If you would invest (100.00) in Papaya Growth Opportunity on December 23, 2024 and sell it today you would earn a total of  100.00  from holding Papaya Growth Opportunity 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

Papaya Growth Opportunity  vs.  PETRONAS Gas Berhad

Papaya Growth Opportunity

Risk-Adjusted Performance

Very Weak

Over the last 90 days Papaya Growth Opportunity has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Papaya Growth is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

PETRONAS Gas Berhad

Risk-Adjusted Performance

Very Weak

Over the last 90 days PETRONAS Gas Berhad has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, PETRONAS Gas is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Papaya Growth and PETRONAS Gas

The main advantage of trading using opposite Papaya Growth and PETRONAS Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Papaya Growth 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.

The idea behind Papaya Growth Opportunity and PETRONAS Gas Berhad 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.