Correlation Between China Aircraft and Bukit Jalil

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

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

Diversification Opportunities for China Aircraft and Bukit Jalil

0.67

Correlation Coefficient

China Aircraft  Bukit Jalil

Poor diversification

The 3 months correlation between China and Bukit is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding China Aircraft Leasing 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 China Aircraft 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 China Aircraft Leasing 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 China Aircraft i.e., China Aircraft and Bukit Jalil go up and down completely randomly.

Pair Corralation between China Aircraft and Bukit Jalil

Assuming the 90 days horizon China Aircraft is expected to generate 2.4 times less return on investment than Bukit Jalil. But when comparing it to its historical volatility, China Aircraft Leasing is 3.76 times less risky than Bukit Jalil. It trades about 0.07 of its potential returns per unit of risk. Bukit Jalil Global is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  17.00  in Bukit Jalil Global on September 13, 2024 and sell it today you would lose (6.00) from holding Bukit Jalil Global or give up 35.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	32.67%
Values	Daily Returns

China Aircraft Leasing  vs.  Bukit Jalil Global

China Aircraft Leasing

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days China Aircraft Leasing has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's essential indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Bukit Jalil Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bukit Jalil Global has generated negative risk-adjusted returns adding no value to investors with long positions. Even with fragile performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with China Aircraft and Bukit Jalil

The main advantage of trading using opposite China Aircraft and Bukit Jalil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Aircraft 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 China Aircraft Leasing 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.