Correlation Between Western Digital and Bukit Jalil

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

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

Diversification Opportunities for Western Digital and Bukit Jalil

-0.01

Correlation Coefficient

Western Digital  Bukit Jalil

Good diversification

The 3 months correlation between Western and Bukit is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Western Digital 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 Western Digital 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 Western Digital 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 Western Digital i.e., Western Digital and Bukit Jalil go up and down completely randomly.

Pair Corralation between Western Digital and Bukit Jalil

Considering the 90-day investment horizon Western Digital is expected to generate 0.16 times more return on investment than Bukit Jalil. However, Western Digital is 6.28 times less risky than Bukit Jalil. It trades about -0.06 of its potential returns per unit of risk. Bukit Jalil Global is currently generating about -0.03 per unit of risk. If you would invest  7,638  in Western Digital on September 29, 2024 and sell it today you would lose (1,568) from holding Western Digital or give up 20.53% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	30.16%
Values	Daily Returns

Western Digital  vs.  Bukit Jalil Global

Western Digital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Western Digital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Bukit Jalil Global

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bukit Jalil Global are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. 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 Western Digital and Bukit Jalil

The main advantage of trading using opposite Western Digital and Bukit Jalil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Digital 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 Western Digital 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.