Correlation Between Bukit Jalil and BCE

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

By analyzing existing cross correlation between Bukit Jalil Global and BCE Inc, you can compare the effects of market volatilities on Bukit Jalil and BCE 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 Bukit Jalil with a short position of BCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bukit Jalil and BCE.

Diversification Opportunities for Bukit Jalil and BCE

0.69

Correlation Coefficient

Bukit Jalil  BCE

Poor diversification

The 3 months correlation between Bukit and BCE is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Bukit Jalil Global and BCE Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCE Inc and Bukit Jalil 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 Bukit Jalil Global are associated (or correlated) with BCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCE Inc has no effect on the direction of Bukit Jalil i.e., Bukit Jalil and BCE go up and down completely randomly.

Pair Corralation between Bukit Jalil and BCE

Assuming the 90 days horizon Bukit Jalil Global is expected to generate 14.44 times more return on investment than BCE. However, Bukit Jalil is 14.44 times more volatile than BCE Inc. It trades about 0.07 of its potential returns per unit of risk. BCE Inc is currently generating about -0.15 per unit of risk. If you would invest  11.00  in Bukit Jalil Global on October 2, 2024 and sell it today you would lose (1.00) from holding Bukit Jalil Global or give up 9.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	39.3%
Values	Daily Returns

Bukit Jalil Global  vs.  BCE Inc

Bukit Jalil Global

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bukit Jalil Global are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, Bukit Jalil reported solid returns over the last few months and may actually be approaching a breakup point.

BCE Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BCE Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Bukit Jalil and BCE

The main advantage of trading using opposite Bukit Jalil and BCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bukit Jalil position performs unexpectedly, BCE 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 BCE will offset losses from the drop in BCE's long position.

The idea behind Bukit Jalil Global and BCE Inc 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.

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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.