Correlation Between JAKS Resources and Eonmetall Group
Can any of the company-specific risk be diversified away by investing in both JAKS Resources and Eonmetall Group 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 JAKS Resources and Eonmetall Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JAKS Resources Bhd and Eonmetall Group Bhd, you can compare the effects of market volatilities on JAKS Resources and Eonmetall Group 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 JAKS Resources with a short position of Eonmetall Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of JAKS Resources and Eonmetall Group.
Diversification Opportunities for JAKS Resources and Eonmetall Group
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between JAKS and Eonmetall is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding JAKS Resources Bhd and Eonmetall Group Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eonmetall Group Bhd and JAKS Resources 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 JAKS Resources Bhd are associated (or correlated) with Eonmetall Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eonmetall Group Bhd has no effect on the direction of JAKS Resources i.e., JAKS Resources and Eonmetall Group go up and down completely randomly.
Pair Corralation between JAKS Resources and Eonmetall Group
Assuming the 90 days trading horizon JAKS Resources Bhd is expected to generate 1.52 times more return on investment than Eonmetall Group. However, JAKS Resources is 1.52 times more volatile than Eonmetall Group Bhd. It trades about -0.01 of its potential returns per unit of risk. Eonmetall Group Bhd is currently generating about -0.06 per unit of risk. If you would invest 17.00 in JAKS Resources Bhd on September 26, 2024 and sell it today you would lose (3.00) from holding JAKS Resources Bhd or give up 17.65% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
JAKS Resources Bhd vs. Eonmetall Group Bhd
Performance |
Timeline |
JAKS Resources Bhd |
Eonmetall Group Bhd |
JAKS Resources and Eonmetall Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with JAKS Resources and Eonmetall Group
The main advantage of trading using opposite JAKS Resources and Eonmetall Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JAKS Resources position performs unexpectedly, Eonmetall Group 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 Eonmetall Group will offset losses from the drop in Eonmetall Group's long position.JAKS Resources vs. Eonmetall Group Bhd | JAKS Resources vs. YX Precious Metals | JAKS Resources vs. Sports Toto Berhad | JAKS Resources vs. Systech Bhd |
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Check out your portfolio center.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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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