Correlation Between Bukit Jalil and Worthington Steel

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

Diversification Opportunities for Bukit Jalil and Worthington Steel

-0.16

Correlation Coefficient

Bukit Jalil  Worthington Steel

Good diversification

The 3 months correlation between Bukit and Worthington is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Bukit Jalil Global and Worthington Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Worthington Steel 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 Worthington Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Worthington Steel has no effect on the direction of Bukit Jalil i.e., Bukit Jalil and Worthington Steel go up and down completely randomly.

Pair Corralation between Bukit Jalil and Worthington Steel

Assuming the 90 days horizon Bukit Jalil Global is expected to generate 4.14 times more return on investment than Worthington Steel. However, Bukit Jalil is 4.14 times more volatile than Worthington Steel. It trades about 0.04 of its potential returns per unit of risk. Worthington Steel is currently generating about 0.04 per unit of risk. If you would invest  17.00  in Bukit Jalil Global on October 4, 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 Against
Strength	Insignificant
Accuracy	43.68%
Values	Daily Returns

Bukit Jalil Global  vs.  Worthington Steel

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.

Worthington Steel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Worthington Steel has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Worthington Steel is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Bukit Jalil and Worthington Steel

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

The idea behind Bukit Jalil Global and Worthington Steel 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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.