Correlation Between Fomento Economico and Bukit Jalil

Can any of the company-specific risk be diversified away by investing in both Fomento Economico and Bukit Jalil 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 Fomento Economico and Bukit Jalil into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fomento Economico Mexicano and Bukit Jalil Global, you can compare the effects of market volatilities on Fomento Economico and Bukit Jalil 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 Fomento Economico with a short position of Bukit Jalil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fomento Economico and Bukit Jalil.

Diversification Opportunities for Fomento Economico and Bukit Jalil

0.57

Correlation Coefficient

Fomento Economico  Bukit Jalil

Very weak diversification

The 3 months correlation between Fomento and Bukit is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Fomento Economico Mexicano and Bukit Jalil Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bukit Jalil Global and Fomento Economico 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 Fomento Economico Mexicano are associated (or correlated) with Bukit Jalil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bukit Jalil Global has no effect on the direction of Fomento Economico i.e., Fomento Economico and Bukit Jalil go up and down completely randomly.

Pair Corralation between Fomento Economico and Bukit Jalil

Considering the 90-day investment horizon Fomento Economico is expected to generate 14.85 times less return on investment than Bukit Jalil. But when comparing it to its historical volatility, Fomento Economico Mexicano is 8.05 times less risky than Bukit Jalil. It trades about 0.13 of its potential returns per unit of risk. Bukit Jalil Global is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  10.00  in Bukit Jalil Global on December 21, 2024 and sell it today you would earn a total of  13.00  from holding Bukit Jalil Global or generate 130.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	58.33%
Values	Daily Returns

Fomento Economico Mexicano  vs.  Bukit Jalil Global

Fomento Economico

Risk-Adjusted Performance

Good

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

Bukit Jalil Global

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bukit Jalil Global are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Bukit Jalil reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fomento Economico and Bukit Jalil

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

The idea behind Fomento Economico Mexicano and Bukit Jalil Global 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.