Correlation Between Bukit Jalil and YHN Acquisition

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

Diversification Opportunities for Bukit Jalil and YHN Acquisition

-0.47

Correlation Coefficient

Bukit Jalil  YHN Acquisition

Very good diversification

The 3 months correlation between Bukit and YHN is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Bukit Jalil Global and YHN Acquisition I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YHN Acquisition I 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 YHN Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YHN Acquisition I has no effect on the direction of Bukit Jalil i.e., Bukit Jalil and YHN Acquisition go up and down completely randomly.

Pair Corralation between Bukit Jalil and YHN Acquisition

Assuming the 90 days horizon Bukit Jalil Global is expected to generate 29.49 times more return on investment than YHN Acquisition. However, Bukit Jalil is 29.49 times more volatile than YHN Acquisition I. It trades about 0.04 of its potential returns per unit of risk. YHN Acquisition I is currently generating about 0.04 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 Against
Strength	Very Weak
Accuracy	63.64%
Values	Daily Returns

Bukit Jalil Global  vs.  YHN Acquisition I

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.

YHN Acquisition I

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in YHN Acquisition I are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, YHN Acquisition is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Bukit Jalil and YHN Acquisition

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

The idea behind Bukit Jalil Global and YHN Acquisition I 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.