Correlation Between Southern Steel and JAKS Resources
Can any of the company-specific risk be diversified away by investing in both Southern Steel 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 Southern Steel and JAKS Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southern Steel Bhd and JAKS Resources Bhd, you can compare the effects of market volatilities on Southern Steel 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 Southern Steel with a short position of JAKS Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern Steel and JAKS Resources.
Diversification Opportunities for Southern Steel and JAKS Resources
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Southern and JAKS is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Southern Steel 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 Southern Steel 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 Southern Steel 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 Southern Steel i.e., Southern Steel and JAKS Resources go up and down completely randomly.
Pair Corralation between Southern Steel and JAKS Resources
Assuming the 90 days trading horizon Southern Steel Bhd is expected to under-perform the JAKS Resources. But the stock apears to be less risky and, when comparing its historical volatility, Southern Steel Bhd is 2.61 times less risky than JAKS Resources. The stock trades about -0.07 of its potential returns per unit of risk. The JAKS Resources Bhd is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 14.00 in JAKS Resources Bhd on October 22, 2024 and sell it today you would lose (1.00) from holding JAKS Resources Bhd or give up 7.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southern Steel Bhd vs. JAKS Resources Bhd
Performance |
| Timeline |
| Southern Steel Bhd |
| JAKS Resources Bhd |
Southern Steel and JAKS Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern Steel and JAKS Resources
The main advantage of trading using opposite Southern Steel and JAKS Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern Steel 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.| Southern Steel vs. Supercomnet Technologies Bhd | Southern Steel vs. CPE Technology Berhad | Southern Steel vs. ES Ceramics Technology | Southern Steel vs. Greatech Technology Bhd |
| 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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