Correlation Between Kobay Tech and JAKS Resources
Can any of the company-specific risk be diversified away by investing in both Kobay Tech 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 Kobay Tech and JAKS Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kobay Tech Bhd and JAKS Resources Bhd, you can compare the effects of market volatilities on Kobay Tech 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 Kobay Tech with a short position of JAKS Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kobay Tech and JAKS Resources.
Diversification Opportunities for Kobay Tech and JAKS Resources
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Kobay and JAKS is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Kobay Tech 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 Kobay Tech 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 Kobay Tech 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 Kobay Tech i.e., Kobay Tech and JAKS Resources go up and down completely randomly.
Pair Corralation between Kobay Tech and JAKS Resources
Assuming the 90 days trading horizon Kobay Tech Bhd is expected to under-perform the JAKS Resources. But the stock apears to be less risky and, when comparing its historical volatility, Kobay Tech Bhd is 1.15 times less risky than JAKS Resources. The stock trades about -0.08 of its potential returns per unit of risk. The JAKS Resources Bhd is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 18.00 in JAKS Resources Bhd on October 26, 2024 and sell it today you would lose (5.00) from holding JAKS Resources Bhd or give up 27.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kobay Tech Bhd vs. JAKS Resources Bhd
Performance |
| Timeline |
| Kobay Tech Bhd |
| JAKS Resources Bhd |
Kobay Tech and JAKS Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kobay Tech and JAKS Resources
The main advantage of trading using opposite Kobay Tech and JAKS Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kobay Tech 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.| Kobay Tech vs. Rubberex M | Kobay Tech vs. Public Bank Bhd | Kobay Tech vs. SSF Home Group | Kobay Tech vs. Star Media Group |
| JAKS Resources vs. Kobay Tech Bhd | JAKS Resources vs. Cloudpoint Technology Berhad | JAKS Resources vs. Binasat Communications Bhd | JAKS Resources vs. Berjaya Food Bhd |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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