Correlation Between Tandem Diabetes and Bukit Jalil

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

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

Diversification Opportunities for Tandem Diabetes and Bukit Jalil

0.15

Correlation Coefficient

Tandem Diabetes  Bukit Jalil

Average diversification

The 3 months correlation between Tandem and Bukit is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Tandem Diabetes Care 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 Tandem Diabetes 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 Tandem Diabetes Care 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 Tandem Diabetes i.e., Tandem Diabetes and Bukit Jalil go up and down completely randomly.

Pair Corralation between Tandem Diabetes and Bukit Jalil

Given the investment horizon of 90 days Tandem Diabetes Care is expected to generate 0.14 times more return on investment than Bukit Jalil. However, Tandem Diabetes Care is 7.12 times less risky than Bukit Jalil. It trades about 0.29 of its potential returns per unit of risk. Bukit Jalil Global is currently generating about 0.04 per unit of risk. If you would invest  3,210  in Tandem Diabetes Care on October 9, 2024 and sell it today you would earn a total of  525.00  from holding Tandem Diabetes Care or generate 16.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	42.11%
Values	Daily Returns

Tandem Diabetes Care  vs.  Bukit Jalil Global

Tandem Diabetes Care

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tandem Diabetes Care has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Tandem Diabetes is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Bukit Jalil Global

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days Bukit Jalil Global has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively inconsistent basic indicators, Bukit Jalil reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tandem Diabetes and Bukit Jalil

The main advantage of trading using opposite Tandem Diabetes and Bukit Jalil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tandem Diabetes 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 Tandem Diabetes Care 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.