Correlation Between JAKS Resources and KPJ Healthcare
Can any of the company-specific risk be diversified away by investing in both JAKS Resources and KPJ Healthcare 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 JAKS Resources and KPJ Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JAKS Resources Bhd and KPJ Healthcare Bhd, you can compare the effects of market volatilities on JAKS Resources and KPJ Healthcare 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 JAKS Resources with a short position of KPJ Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of JAKS Resources and KPJ Healthcare.
Diversification Opportunities for JAKS Resources and KPJ Healthcare
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between JAKS and KPJ is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding JAKS Resources Bhd and KPJ Healthcare Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KPJ Healthcare Bhd and JAKS Resources 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 JAKS Resources Bhd are associated (or correlated) with KPJ Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KPJ Healthcare Bhd has no effect on the direction of JAKS Resources i.e., JAKS Resources and KPJ Healthcare go up and down completely randomly.
Pair Corralation between JAKS Resources and KPJ Healthcare
Assuming the 90 days trading horizon JAKS Resources is expected to generate 2.22 times less return on investment than KPJ Healthcare. In addition to that, JAKS Resources is 2.25 times more volatile than KPJ Healthcare Bhd. It trades about 0.03 of its total potential returns per unit of risk. KPJ Healthcare Bhd is currently generating about 0.13 per unit of volatility. If you would invest 219.00 in KPJ Healthcare Bhd on September 14, 2024 and sell it today you would earn a total of 15.00 from holding KPJ Healthcare Bhd or generate 6.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JAKS Resources Bhd vs. KPJ Healthcare Bhd
Performance |
| Timeline |
| JAKS Resources Bhd |
| KPJ Healthcare Bhd |
JAKS Resources and KPJ Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JAKS Resources and KPJ Healthcare
The main advantage of trading using opposite JAKS Resources and KPJ Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JAKS Resources position performs unexpectedly, KPJ Healthcare 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 KPJ Healthcare will offset losses from the drop in KPJ Healthcare's long position.| JAKS Resources vs. KPJ Healthcare Bhd | JAKS Resources vs. Sungei Bagan Rubber | JAKS Resources vs. Eversafe Rubber Bhd | JAKS Resources vs. Rubberex M |
| KPJ Healthcare vs. IHH Healthcare Bhd | KPJ Healthcare vs. Lyc Healthcare Bhd | KPJ Healthcare vs. Al Aqar Healthcare | KPJ Healthcare vs. PMB Technology 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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