Correlation Between Bukit Jalil and Via Renewables

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

Diversification Opportunities for Bukit Jalil and Via Renewables

-0.41

Correlation Coefficient

Bukit Jalil  Via Renewables

Very good diversification

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

Pair Corralation between Bukit Jalil and Via Renewables

Assuming the 90 days horizon Bukit Jalil Global is expected to generate 76.5 times more return on investment than Via Renewables. However, Bukit Jalil is 76.5 times more volatile than Via Renewables. It trades about 0.12 of its potential returns per unit of risk. Via Renewables is currently generating about 0.21 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 Against
Strength	Very Weak
Accuracy	64.1%
Values	Daily Returns

Bukit Jalil Global  vs.  Via Renewables

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.

Via Renewables

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Via Renewables are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Via Renewables reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bukit Jalil and Via Renewables

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

The idea behind Bukit Jalil Global and Via Renewables 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.