Correlation Between MI Technovation and JAKS Resources
Can any of the company-specific risk be diversified away by investing in both MI Technovation 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 MI Technovation and JAKS Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MI Technovation Bhd and JAKS Resources Bhd, you can compare the effects of market volatilities on MI Technovation 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 MI Technovation with a short position of JAKS Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of MI Technovation and JAKS Resources.
Diversification Opportunities for MI Technovation and JAKS Resources
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between 5286 and JAKS is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding MI Technovation 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 MI Technovation 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 MI Technovation 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 MI Technovation i.e., MI Technovation and JAKS Resources go up and down completely randomly.
Pair Corralation between MI Technovation and JAKS Resources
Assuming the 90 days trading horizon MI Technovation Bhd is expected to generate 0.5 times more return on investment than JAKS Resources. However, MI Technovation Bhd is 2.0 times less risky than JAKS Resources. It trades about 0.22 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 MI Technovation Bhd on October 22, 2024 and sell it today you would earn a total of 41.00 from holding MI Technovation Bhd or generate 22.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MI Technovation Bhd vs. JAKS Resources Bhd
Performance |
| Timeline |
| MI Technovation Bhd |
| JAKS Resources Bhd |
MI Technovation and JAKS Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MI Technovation and JAKS Resources
The main advantage of trading using opposite MI Technovation and JAKS Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MI Technovation 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.| MI Technovation vs. Cengild Medical Berhad | MI Technovation vs. Daya Materials Bhd | MI Technovation vs. Kluang Rubber | MI Technovation vs. CB Industrial Product |
| JAKS Resources vs. Malaysia Steel Works | JAKS Resources vs. Berjaya Food Bhd | JAKS Resources vs. DC HEALTHCARE HOLDINGS | JAKS Resources vs. Choo Bee Metal |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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