Correlation Between Bukit Jalil and Aston Martin

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

Diversification Opportunities for Bukit Jalil and Aston Martin

0.42

Correlation Coefficient

Bukit Jalil  Aston Martin

Very weak diversification

The 3 months correlation between Bukit and Aston is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Bukit Jalil Global and Aston Martin Lagonda in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aston Martin Lagonda 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 Aston Martin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aston Martin Lagonda has no effect on the direction of Bukit Jalil i.e., Bukit Jalil and Aston Martin go up and down completely randomly.

Pair Corralation between Bukit Jalil and Aston Martin

Assuming the 90 days horizon Bukit Jalil Global is expected to generate 24.32 times more return on investment than Aston Martin. However, Bukit Jalil is 24.32 times more volatile than Aston Martin Lagonda. It trades about 0.12 of its potential returns per unit of risk. Aston Martin Lagonda is currently generating about 0.03 per unit of risk. If you would invest  4.40  in Bukit Jalil Global on October 22, 2024 and sell it today you would lose (1.67) from holding Bukit Jalil Global or give up 37.95% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	64.1%
Values	Daily Returns

Bukit Jalil Global  vs.  Aston Martin Lagonda

Bukit Jalil Global

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bukit Jalil Global are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Bukit Jalil showed solid returns over the last few months and may actually be approaching a breakup point.

Aston Martin Lagonda

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aston Martin Lagonda has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Aston Martin is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bukit Jalil and Aston Martin

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

The idea behind Bukit Jalil Global and Aston Martin Lagonda 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.