Correlation Between Rubberex M and JAKS Resources
Can any of the company-specific risk be diversified away by investing in both Rubberex M 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 Rubberex M and JAKS Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rubberex M and JAKS Resources Bhd, you can compare the effects of market volatilities on Rubberex M 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 Rubberex M with a short position of JAKS Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rubberex M and JAKS Resources.
Diversification Opportunities for Rubberex M and JAKS Resources
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Rubberex and JAKS is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Rubberex M 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 Rubberex M 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 Rubberex M 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 Rubberex M i.e., Rubberex M and JAKS Resources go up and down completely randomly.
Pair Corralation between Rubberex M and JAKS Resources
Assuming the 90 days trading horizon Rubberex M is expected to generate 2.74 times less return on investment than JAKS Resources. But when comparing it to its historical volatility, Rubberex M is 1.66 times less risky than JAKS Resources. It trades about 0.02 of its potential returns per unit of risk. JAKS Resources Bhd is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 13.00 in JAKS Resources Bhd on September 14, 2024 and sell it today you would earn a total of 0.00 from holding JAKS Resources Bhd or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rubberex M vs. JAKS Resources Bhd
Performance |
| Timeline |
| Rubberex M |
| JAKS Resources Bhd |
Rubberex M and JAKS Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rubberex M and JAKS Resources
The main advantage of trading using opposite Rubberex M and JAKS Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rubberex M 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.| Rubberex M vs. Kossan Rubber Industries | Rubberex M vs. Al Aqar Healthcare | Rubberex M vs. PMB Technology Bhd | Rubberex M vs. Digistar 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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