Correlation Between Bukit Jalil and Vine Hill

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

Diversification Opportunities for Bukit Jalil and Vine Hill

0.06

Correlation Coefficient

Bukit Jalil  Vine Hill

Significant diversification

The 3 months correlation between Bukit and Vine is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Bukit Jalil Global and Vine Hill Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vine Hill Capital 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 Vine Hill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vine Hill Capital has no effect on the direction of Bukit Jalil i.e., Bukit Jalil and Vine Hill go up and down completely randomly.

Pair Corralation between Bukit Jalil and Vine Hill

Assuming the 90 days horizon Bukit Jalil Global is expected to generate 167.76 times more return on investment than Vine Hill. However, Bukit Jalil is 167.76 times more volatile than Vine Hill Capital. It trades about 0.04 of its potential returns per unit of risk. Vine Hill Capital is currently generating about 0.16 per unit of risk. If you would invest  17.00  in Bukit Jalil Global on October 5, 2024 and sell it today you would lose (7.00) from holding Bukit Jalil Global or give up 41.18% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	38.02%
Values	Daily Returns

Bukit Jalil Global  vs.  Vine Hill Capital

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 weak basic indicators, Bukit Jalil reported solid returns over the last few months and may actually be approaching a breakup point.

Vine Hill Capital

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vine Hill Capital are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound forward indicators, Vine Hill is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Bukit Jalil and Vine Hill

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

The idea behind Bukit Jalil Global and Vine Hill Capital 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.