Correlation Between Bukit Jalil and Tandem Diabetes

Can any of the company-specific risk be diversified away by investing in both Bukit Jalil and Tandem Diabetes 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 Tandem Diabetes 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 Tandem Diabetes Care, you can compare the effects of market volatilities on Bukit Jalil and Tandem Diabetes 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 Tandem Diabetes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bukit Jalil and Tandem Diabetes.

Diversification Opportunities for Bukit Jalil and Tandem Diabetes

0.15

Correlation Coefficient

Bukit Jalil  Tandem Diabetes

Average diversification

The 3 months correlation between Bukit and Tandem is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Bukit Jalil Global and Tandem Diabetes Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tandem Diabetes Care 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 Tandem Diabetes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tandem Diabetes Care has no effect on the direction of Bukit Jalil i.e., Bukit Jalil and Tandem Diabetes go up and down completely randomly.

Pair Corralation between Bukit Jalil and Tandem Diabetes

Assuming the 90 days horizon Bukit Jalil is expected to generate 1.12 times less return on investment than Tandem Diabetes. In addition to that, Bukit Jalil is 7.12 times more volatile than Tandem Diabetes Care. It trades about 0.04 of its total potential returns per unit of risk. Tandem Diabetes Care is currently generating about 0.29 per unit of volatility. If you would invest  3,210  in Tandem Diabetes Care on October 9, 2024 and sell it today you would earn a total of  525.00  from holding Tandem Diabetes Care or generate 16.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	42.11%
Values	Daily Returns

Bukit Jalil Global  vs.  Tandem Diabetes Care

Bukit Jalil Global

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days Bukit Jalil Global has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively inconsistent basic indicators, Bukit Jalil reported solid returns over the last few months and may actually be approaching a breakup point.

Tandem Diabetes Care

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tandem Diabetes Care has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Tandem Diabetes is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Bukit Jalil and Tandem Diabetes

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

The idea behind Bukit Jalil Global and Tandem Diabetes Care 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.