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
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sungei and JAKS is -0.01. 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 is expected to generate 1.08 times less return on investment than JAKS Resources. But when comparing it to its historical volatility, Sungei Bagan Rubber is 3.45 times less risky than JAKS Resources. It trades about 0.46 of its potential returns per unit of risk. JAKS Resources Bhd is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 12.00 in JAKS Resources Bhd on November 5, 2024 and sell it today you would earn a total of 1.00 from holding JAKS Resources Bhd or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| 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. ES Ceramics Technology | Sungei Bagan vs. Aurelius Technologies Bhd | Sungei Bagan vs. Systech Bhd | Sungei Bagan vs. Press Metal Bhd |
| JAKS Resources vs. Icon Offshore Bhd | JAKS Resources vs. Senheng New Retail | JAKS Resources vs. Choo Bee Metal | JAKS Resources vs. Uchi Technologies Bhd |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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