Correlation Between Poh Huat and JAKS Resources

Can any of the company-specific risk be diversified away by investing in both Poh Huat and JAKS Resources 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 Poh Huat and JAKS Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Poh Huat Resources and JAKS Resources Bhd, you can compare the effects of market volatilities on Poh Huat and JAKS Resources 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 Poh Huat with a short position of JAKS Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Poh Huat and JAKS Resources.

Diversification Opportunities for Poh Huat and JAKS Resources

0.0

Correlation Coefficient

Poh Huat  JAKS Resources

Pay attention - limited upside

The 3 months correlation between Poh and JAKS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Poh Huat Resources and JAKS Resources Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JAKS Resources Bhd and Poh Huat 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 Poh Huat Resources are associated (or correlated) with JAKS Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JAKS Resources Bhd has no effect on the direction of Poh Huat i.e., Poh Huat and JAKS Resources go up and down completely randomly.

Pair Corralation between Poh Huat and JAKS Resources

If you would invest  14.00  in JAKS Resources Bhd on September 25, 2024 and sell it today you would earn a total of  0.00  from holding JAKS Resources Bhd or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Poh Huat Resources  vs.  JAKS Resources Bhd

Poh Huat Resources

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days Poh Huat Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Poh Huat is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

JAKS Resources Bhd

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in JAKS Resources Bhd are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, JAKS Resources is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Poh Huat and JAKS Resources

The main advantage of trading using opposite Poh Huat and JAKS Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Poh Huat position performs unexpectedly, JAKS Resources 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 JAKS Resources will offset losses from the drop in JAKS Resources' long position.

The idea behind Poh Huat Resources and JAKS Resources Bhd 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..