Correlation Between Shangri La and JAKS Resources
Can any of the company-specific risk be diversified away by investing in both Shangri La 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 Shangri La and JAKS Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shangri La Hotels and JAKS Resources Bhd, you can compare the effects of market volatilities on Shangri La 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 Shangri La with a short position of JAKS Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shangri La and JAKS Resources.
Diversification Opportunities for Shangri La and JAKS Resources
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Shangri and JAKS is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Shangri La Hotels 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 Shangri La 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 Shangri La Hotels 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 Shangri La i.e., Shangri La and JAKS Resources go up and down completely randomly.
Pair Corralation between Shangri La and JAKS Resources
Assuming the 90 days trading horizon Shangri La Hotels is expected to under-perform the JAKS Resources. But the stock apears to be less risky and, when comparing its historical volatility, Shangri La Hotels is 2.13 times less risky than JAKS Resources. The stock trades about -0.04 of its potential returns per unit of risk. The JAKS Resources Bhd is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 28.00 in JAKS Resources Bhd on September 2, 2024 and sell it today you would lose (14.00) from holding JAKS Resources Bhd or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shangri La Hotels vs. JAKS Resources Bhd
Performance |
| Timeline |
| Shangri La Hotels |
| JAKS Resources Bhd |
Shangri La and JAKS Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shangri La and JAKS Resources
The main advantage of trading using opposite Shangri La and JAKS Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shangri La 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.| Shangri La vs. Digistar Bhd | Shangri La vs. Minetech Resources Bhd | Shangri La vs. Swift Haulage Bhd | Shangri La vs. Bina Darulaman Bhd |
| JAKS Resources vs. Impiana Hotels Bhd | JAKS Resources vs. Computer Forms Bhd | JAKS Resources vs. Carlsberg Brewery Malaysia | JAKS Resources vs. Shangri La Hotels |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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