Correlation Between Vantage Drilling and Bukit Jalil

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

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

Diversification Opportunities for Vantage Drilling and Bukit Jalil

0.63

Correlation Coefficient

Vantage Drilling  Bukit Jalil

Poor diversification

The 3 months correlation between Vantage and Bukit is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Vantage Drilling International 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 Vantage Drilling 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 Vantage Drilling International 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 Vantage Drilling i.e., Vantage Drilling and Bukit Jalil go up and down completely randomly.

Pair Corralation between Vantage Drilling and Bukit Jalil

If you would invest  11.00  in Bukit Jalil Global on October 9, 2024 and sell it today you would lose (1.00) from holding Bukit Jalil Global or give up 9.09% of portfolio value over 90 days.

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

Vantage Drilling International  vs.  Bukit Jalil Global

Vantage Drilling Int

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vantage Drilling International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Vantage Drilling is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

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 Vantage Drilling and Bukit Jalil

The main advantage of trading using opposite Vantage Drilling and Bukit Jalil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vantage Drilling 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 Vantage Drilling International 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.