Correlation Between JAKS Resources and Pesona Metro
Can any of the company-specific risk be diversified away by investing in both JAKS Resources and Pesona Metro 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 Pesona Metro 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 Pesona Metro Holdings, you can compare the effects of market volatilities on JAKS Resources and Pesona Metro 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 Pesona Metro. Check out your portfolio center. Please also check ongoing floating volatility patterns of JAKS Resources and Pesona Metro.
Diversification Opportunities for JAKS Resources and Pesona Metro
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between JAKS and Pesona is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding JAKS Resources Bhd and Pesona Metro Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pesona Metro Holdings 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 Pesona Metro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pesona Metro Holdings has no effect on the direction of JAKS Resources i.e., JAKS Resources and Pesona Metro go up and down completely randomly.
Pair Corralation between JAKS Resources and Pesona Metro
Assuming the 90 days trading horizon JAKS Resources is expected to generate 1.26 times less return on investment than Pesona Metro. In addition to that, JAKS Resources is 1.89 times more volatile than Pesona Metro Holdings. It trades about 0.09 of its total potential returns per unit of risk. Pesona Metro Holdings is currently generating about 0.23 per unit of volatility. If you would invest 24.00 in Pesona Metro Holdings on September 3, 2024 and sell it today you would earn a total of 3.00 from holding Pesona Metro Holdings or generate 12.5% 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. Pesona Metro Holdings
Performance |
| Timeline |
| JAKS Resources Bhd |
| Pesona Metro Holdings |
JAKS Resources and Pesona Metro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JAKS Resources and Pesona Metro
The main advantage of trading using opposite JAKS Resources and Pesona Metro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JAKS Resources position performs unexpectedly, Pesona Metro 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 Pesona Metro will offset losses from the drop in Pesona Metro's long position.| JAKS Resources vs. Berjaya Food Bhd | JAKS Resources vs. Public Packages Holdings | JAKS Resources vs. Mycron Steel Bhd | JAKS Resources vs. YX Precious Metals |
| Pesona Metro vs. Sunway Construction Group | Pesona Metro vs. Ho Hup Construction | Pesona Metro vs. Central Industrial Corp | Pesona Metro vs. Protasco 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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