Correlation Between MClean Technologies and JAKS Resources

Can any of the company-specific risk be diversified away by investing in both MClean Technologies 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 MClean Technologies and JAKS Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MClean Technologies Bhd and JAKS Resources Bhd, you can compare the effects of market volatilities on MClean Technologies 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 MClean Technologies with a short position of JAKS Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of MClean Technologies and JAKS Resources.

Diversification Opportunities for MClean Technologies and JAKS Resources

0.03

Correlation Coefficient

MClean Technologies  JAKS Resources

Significant diversification

The 3 months correlation between MClean and JAKS is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding MClean Technologies 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 MClean Technologies 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 MClean Technologies 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 MClean Technologies i.e., MClean Technologies and JAKS Resources go up and down completely randomly.

Pair Corralation between MClean Technologies and JAKS Resources

Assuming the 90 days trading horizon MClean Technologies Bhd is expected to generate 0.74 times more return on investment than JAKS Resources. However, MClean Technologies Bhd is 1.36 times less risky than JAKS Resources. It trades about -0.03 of its potential returns per unit of risk. JAKS Resources Bhd is currently generating about -0.06 per unit of risk. If you would invest  31.00  in MClean Technologies Bhd on December 30, 2024 and sell it today you would lose (3.00) from holding MClean Technologies Bhd or give up 9.68% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

MClean Technologies Bhd  vs.  JAKS Resources Bhd

MClean Technologies Bhd

Risk-Adjusted Performance

Very Weak

Over the last 90 days MClean Technologies Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

JAKS Resources Bhd

Risk-Adjusted Performance

Very Weak

Over the last 90 days JAKS Resources Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with MClean Technologies and JAKS Resources

The main advantage of trading using opposite MClean Technologies and JAKS Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MClean Technologies 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.

The idea behind MClean Technologies Bhd and JAKS Resources Bhd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.