Correlation Between KPJ Healthcare and JAKS Resources
Can any of the company-specific risk be diversified away by investing in both KPJ Healthcare 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 KPJ Healthcare and JAKS Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KPJ Healthcare Bhd and JAKS Resources Bhd, you can compare the effects of market volatilities on KPJ Healthcare 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 KPJ Healthcare with a short position of JAKS Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of KPJ Healthcare and JAKS Resources.
Diversification Opportunities for KPJ Healthcare and JAKS Resources
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between KPJ and JAKS is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding KPJ Healthcare 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 KPJ Healthcare 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 KPJ Healthcare 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 KPJ Healthcare i.e., KPJ Healthcare and JAKS Resources go up and down completely randomly.
Pair Corralation between KPJ Healthcare and JAKS Resources
Assuming the 90 days trading horizon KPJ Healthcare Bhd is expected to generate 0.35 times more return on investment than JAKS Resources. However, KPJ Healthcare Bhd is 2.85 times less risky than JAKS Resources. It trades about 0.17 of its potential returns per unit of risk. JAKS Resources Bhd is currently generating about -0.02 per unit of risk. If you would invest 125.00 in KPJ Healthcare Bhd on September 14, 2024 and sell it today you would earn a total of 109.00 from holding KPJ Healthcare Bhd or generate 87.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KPJ Healthcare Bhd vs. JAKS Resources Bhd
Performance |
| Timeline |
| KPJ Healthcare Bhd |
| JAKS Resources Bhd |
KPJ Healthcare and JAKS Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KPJ Healthcare and JAKS Resources
The main advantage of trading using opposite KPJ Healthcare and JAKS Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KPJ Healthcare 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.| KPJ Healthcare vs. IHH Healthcare Bhd | KPJ Healthcare vs. Lyc Healthcare Bhd | KPJ Healthcare vs. Al Aqar Healthcare | KPJ Healthcare vs. PMB Technology Bhd |
| JAKS Resources vs. KPJ Healthcare Bhd | JAKS Resources vs. Sungei Bagan Rubber | JAKS Resources vs. Eversafe Rubber Bhd | JAKS Resources vs. Rubberex M |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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