Correlation Between Sungei Bagan and JAKS Resources
Can any of the company-specific risk be diversified away by investing in both Sungei Bagan and JAKS 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 Sungei Bagan and JAKS Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sungei Bagan Rubber and JAKS Resources Bhd, you can compare the effects of market volatilities on Sungei Bagan and JAKS 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 Sungei Bagan with a short position of JAKS Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungei Bagan and JAKS Resources.
Diversification Opportunities for Sungei Bagan and JAKS Resources
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sungei and JAKS is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Sungei Bagan Rubber and JAKS Resources Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JAKS Resources Bhd and Sungei Bagan 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 Sungei Bagan Rubber are associated (or correlated) with JAKS Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JAKS Resources Bhd has no effect on the direction of Sungei Bagan i.e., Sungei Bagan and JAKS Resources go up and down completely randomly.
Pair Corralation between Sungei Bagan and JAKS Resources
Assuming the 90 days trading horizon Sungei Bagan Rubber is expected to under-perform the JAKS Resources. But the stock apears to be less risky and, when comparing its historical volatility, Sungei Bagan Rubber is 5.59 times less risky than JAKS Resources. The stock trades about -0.22 of its potential returns per unit of risk. The JAKS Resources Bhd is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 13.00 in JAKS Resources Bhd on September 14, 2024 and sell it today you would earn a total of 0.00 from holding JAKS Resources Bhd or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sungei Bagan Rubber vs. JAKS Resources Bhd
Performance |
| Timeline |
| Sungei Bagan Rubber |
| JAKS Resources Bhd |
Sungei Bagan and JAKS Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungei Bagan and JAKS Resources
The main advantage of trading using opposite Sungei Bagan and JAKS Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungei Bagan position performs unexpectedly, JAKS 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 JAKS Resources will offset losses from the drop in JAKS Resources' long position.| Sungei Bagan vs. Apex Healthcare Bhd | Sungei Bagan vs. Duopharma Biotech Bhd | Sungei Bagan vs. Malayan Banking Bhd | Sungei Bagan vs. Eonmetall Group Bhd |
| JAKS Resources vs. KPJ Healthcare Bhd | JAKS Resources vs. Sungei Bagan Rubber | JAKS Resources vs. Eversafe Rubber Bhd | JAKS Resources vs. Rubberex M |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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