Correlation Between Sunway Construction and JAKS Resources
Can any of the company-specific risk be diversified away by investing in both Sunway Construction 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 Sunway Construction and JAKS Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunway Construction Group and JAKS Resources Bhd, you can compare the effects of market volatilities on Sunway Construction 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 Sunway Construction with a short position of JAKS Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunway Construction and JAKS Resources.
Diversification Opportunities for Sunway Construction and JAKS Resources
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sunway and JAKS is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Sunway Construction Group 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 Sunway Construction 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 Sunway Construction Group 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 Sunway Construction i.e., Sunway Construction and JAKS Resources go up and down completely randomly.
Pair Corralation between Sunway Construction and JAKS Resources
Assuming the 90 days trading horizon Sunway Construction Group is expected to generate 0.6 times more return on investment than JAKS Resources. However, Sunway Construction Group is 1.66 times less risky than JAKS Resources. It trades about 0.16 of its potential returns per unit of risk. JAKS Resources Bhd is currently generating about -0.01 per unit of risk. If you would invest 179.00 in Sunway Construction Group on September 3, 2024 and sell it today you would earn a total of 261.00 from holding Sunway Construction Group or generate 145.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunway Construction Group vs. JAKS Resources Bhd
Performance |
| Timeline |
| Sunway Construction |
| JAKS Resources Bhd |
Sunway Construction and JAKS Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunway Construction and JAKS Resources
The main advantage of trading using opposite Sunway Construction and JAKS Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunway Construction 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.| Sunway Construction vs. Pesona Metro Holdings | Sunway Construction vs. Ho Hup Construction | Sunway Construction vs. Central Industrial Corp |
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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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