Correlation Between Bukit Jalil and Reservoir Media

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

Diversification Opportunities for Bukit Jalil and Reservoir Media

0.41

Correlation Coefficient

Bukit Jalil  Reservoir Media

Very weak diversification

The 3 months correlation between Bukit and Reservoir is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Bukit Jalil Global and Reservoir Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reservoir Media 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 Reservoir Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reservoir Media has no effect on the direction of Bukit Jalil i.e., Bukit Jalil and Reservoir Media go up and down completely randomly.

Pair Corralation between Bukit Jalil and Reservoir Media

Assuming the 90 days horizon Bukit Jalil Global is expected to generate 8.68 times more return on investment than Reservoir Media. However, Bukit Jalil is 8.68 times more volatile than Reservoir Media. It trades about 0.1 of its potential returns per unit of risk. Reservoir Media is currently generating about -0.17 per unit of risk. If you would invest  2.90  in Bukit Jalil Global on December 21, 2024 and sell it today you would earn a total of  0.39  from holding Bukit Jalil Global or generate 13.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	47.46%
Values	Daily Returns

Bukit Jalil Global  vs.  Reservoir Media

Bukit Jalil Global

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bukit Jalil Global are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Bukit Jalil showed solid returns over the last few months and may actually be approaching a breakup point.

Reservoir Media

Risk-Adjusted Performance

Very Weak

Over the last 90 days Reservoir Media has generated negative risk-adjusted returns adding no value to investors with long positions. Even with inconsistent performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Bukit Jalil and Reservoir Media

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

The idea behind Bukit Jalil Global and Reservoir Media 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.