Correlation Between JAKS Resources and Central Industrial
Can any of the company-specific risk be diversified away by investing in both JAKS Resources and Central Industrial 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 Central Industrial 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 Central Industrial Corp, you can compare the effects of market volatilities on JAKS Resources and Central Industrial 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 Central Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of JAKS Resources and Central Industrial.
Diversification Opportunities for JAKS Resources and Central Industrial
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between JAKS and Central is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding JAKS Resources Bhd and Central Industrial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Industrial Corp 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 Central Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Industrial Corp has no effect on the direction of JAKS Resources i.e., JAKS Resources and Central Industrial go up and down completely randomly.
Pair Corralation between JAKS Resources and Central Industrial
Assuming the 90 days trading horizon JAKS Resources is expected to generate 1.11 times less return on investment than Central Industrial. In addition to that, JAKS Resources is 6.33 times more volatile than Central Industrial Corp. It trades about 0.02 of its total potential returns per unit of risk. Central Industrial Corp is currently generating about 0.15 per unit of volatility. If you would invest 83.00 in Central Industrial Corp on August 29, 2024 and sell it today you would earn a total of 2.00 from holding Central Industrial Corp or generate 2.41% 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. Central Industrial Corp
Performance |
| Timeline |
| JAKS Resources Bhd |
| Central Industrial Corp |
JAKS Resources and Central Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JAKS Resources and Central Industrial
The main advantage of trading using opposite JAKS Resources and Central Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JAKS Resources position performs unexpectedly, Central Industrial 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 Central Industrial will offset losses from the drop in Central Industrial's long position.| JAKS Resources vs. Malayan Banking Bhd | JAKS Resources vs. Duopharma Biotech Bhd | JAKS Resources vs. PMB Technology Bhd | JAKS Resources vs. Petronas Chemicals Group |
| Central Industrial vs. JAKS Resources Bhd | Central Industrial vs. Protasco Bhd | Central Industrial vs. Mercury Industries 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |