Correlation Between Petronas Gas and QL Resources
Can any of the company-specific risk be diversified away by investing in both Petronas Gas and QL Resources 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 QL Resources 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 QL Resources Bhd, you can compare the effects of market volatilities on Petronas Gas and QL Resources 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 QL Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petronas Gas and QL Resources.
Diversification Opportunities for Petronas Gas and QL Resources
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Petronas and 7084 is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Petronas Gas Bhd and QL Resources Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QL Resources Bhd 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 QL Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QL Resources Bhd has no effect on the direction of Petronas Gas i.e., Petronas Gas and QL Resources go up and down completely randomly.
Pair Corralation between Petronas Gas and QL Resources
Assuming the 90 days trading horizon Petronas Gas Bhd is expected to under-perform the QL Resources. But the stock apears to be less risky and, when comparing its historical volatility, Petronas Gas Bhd is 1.5 times less risky than QL Resources. The stock trades about 0.0 of its potential returns per unit of risk. The QL Resources Bhd is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 432.00 in QL Resources Bhd on September 25, 2024 and sell it today you would earn a total of 42.00 from holding QL Resources Bhd or generate 9.72% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 99.21% |
Values | Daily Returns |
Petronas Gas Bhd vs. QL Resources Bhd
Performance |
Timeline |
Petronas Gas Bhd |
QL Resources Bhd |
Petronas Gas and QL Resources Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Petronas Gas and QL Resources
The main advantage of trading using opposite Petronas Gas and QL Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petronas Gas position performs unexpectedly, QL Resources 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 QL Resources will offset losses from the drop in QL Resources' long position.Petronas Gas vs. Scientex Bhd | Petronas Gas vs. Sunway Construction Group | Petronas Gas vs. ViTrox Bhd | Petronas Gas vs. Ancom Berhad |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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