Correlation Between Media Prima and JAKS Resources
Can any of the company-specific risk be diversified away by investing in both Media Prima 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 Media Prima and JAKS Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Media Prima Bhd and JAKS Resources Bhd, you can compare the effects of market volatilities on Media Prima 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 Media Prima with a short position of JAKS Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Media Prima and JAKS Resources.
Diversification Opportunities for Media Prima and JAKS Resources
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Media and JAKS is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Media Prima Bhd 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 Media Prima 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 Media Prima Bhd 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 Media Prima i.e., Media Prima and JAKS Resources go up and down completely randomly.
Pair Corralation between Media Prima and JAKS Resources
Assuming the 90 days trading horizon Media Prima is expected to generate 2.57 times less return on investment than JAKS Resources. But when comparing it to its historical volatility, Media Prima Bhd is 4.94 times less risky than JAKS Resources. It trades about 0.04 of its potential returns per unit of risk. JAKS Resources Bhd is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 13.00 in JAKS Resources Bhd on October 26, 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Media Prima Bhd vs. JAKS Resources Bhd
Performance |
| Timeline |
| Media Prima Bhd |
| JAKS Resources Bhd |
Media Prima and JAKS Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Media Prima and JAKS Resources
The main advantage of trading using opposite Media Prima and JAKS Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Media Prima 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.| Media Prima vs. Kobay Tech Bhd | Media Prima vs. Malaysia Steel Works | Media Prima vs. Aurelius Technologies Bhd | Media Prima vs. Leader Steel Holdings |
| JAKS Resources vs. Kobay Tech Bhd | JAKS Resources vs. Cloudpoint Technology Berhad | JAKS Resources vs. Binasat Communications Bhd | JAKS Resources vs. Berjaya Food 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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