Correlation Between Skechers USA and Bukit Jalil

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

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

Diversification Opportunities for Skechers USA and Bukit Jalil

0.07

Correlation Coefficient

Skechers USA  Bukit Jalil

Significant diversification

The 3 months correlation between Skechers and Bukit is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Skechers USA 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 Skechers USA 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 Skechers USA 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 Skechers USA i.e., Skechers USA and Bukit Jalil go up and down completely randomly.

Pair Corralation between Skechers USA and Bukit Jalil

Considering the 90-day investment horizon Skechers USA is expected to under-perform the Bukit Jalil. But the stock apears to be less risky and, when comparing its historical volatility, Skechers USA is 5.5 times less risky than Bukit Jalil. The stock trades about -0.09 of its potential returns per unit of risk. The Bukit Jalil Global is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  7.25  in Bukit Jalil Global on December 20, 2024 and sell it today you would earn a total of  16.75  from holding Bukit Jalil Global or generate 231.03% return on investment over 90 days.

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

Skechers USA  vs.  Bukit Jalil Global

Skechers USA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Skechers USA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward-looking signals remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

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 24 (%) 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 Skechers USA and Bukit Jalil

The main advantage of trading using opposite Skechers USA and Bukit Jalil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skechers USA 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 Skechers USA 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.