Correlation Between Sanichi Technology and Petronas Chemicals

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

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

Diversification Opportunities for Sanichi Technology and Petronas Chemicals

0.47

Correlation Coefficient

Sanichi Technology  Petronas Chemicals

Very weak diversification

The 3 months correlation between Sanichi and Petronas is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Sanichi Technology Bhd and Petronas Chemicals Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petronas Chemicals and Sanichi Technology 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 Sanichi Technology Bhd are associated (or correlated) with Petronas Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petronas Chemicals has no effect on the direction of Sanichi Technology i.e., Sanichi Technology and Petronas Chemicals go up and down completely randomly.

Pair Corralation between Sanichi Technology and Petronas Chemicals

Assuming the 90 days trading horizon Sanichi Technology Bhd is expected to under-perform the Petronas Chemicals. In addition to that, Sanichi Technology is 1.64 times more volatile than Petronas Chemicals Group. It trades about 0.0 of its total potential returns per unit of risk. Petronas Chemicals Group is currently generating about 0.09 per unit of volatility. If you would invest  345.00  in Petronas Chemicals Group on May 8, 2025 and sell it today you would earn a total of  49.00  from holding Petronas Chemicals Group or generate 14.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Sanichi Technology Bhd  vs.  Petronas Chemicals Group

Sanichi Technology Bhd

Risk-Adjusted Performance

Weakest

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

Petronas Chemicals

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Petronas Chemicals Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Petronas Chemicals disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sanichi Technology and Petronas Chemicals

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

The idea behind Sanichi Technology Bhd and Petronas Chemicals Group 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.

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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.