Correlation Between JF Technology and ES Ceramics
Can any of the company-specific risk be diversified away by investing in both JF Technology and ES Ceramics 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 JF Technology and ES Ceramics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JF Technology BHD and ES Ceramics Technology, you can compare the effects of market volatilities on JF Technology and ES Ceramics 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 JF Technology with a short position of ES Ceramics. Check out your portfolio center. Please also check ongoing floating volatility patterns of JF Technology and ES Ceramics.
Diversification Opportunities for JF Technology and ES Ceramics
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 0146 and 0100 is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding JF Technology BHD and ES Ceramics Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ES Ceramics Technology and JF Technology 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 JF Technology BHD are associated (or correlated) with ES Ceramics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ES Ceramics Technology has no effect on the direction of JF Technology i.e., JF Technology and ES Ceramics go up and down completely randomly.
Pair Corralation between JF Technology and ES Ceramics
Assuming the 90 days trading horizon JF Technology BHD is expected to under-perform the ES Ceramics. But the stock apears to be less risky and, when comparing its historical volatility, JF Technology BHD is 1.42 times less risky than ES Ceramics. The stock trades about -0.02 of its potential returns per unit of risk. The ES Ceramics Technology is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 22.00 in ES Ceramics Technology on August 30, 2024 and sell it today you would lose (7.00) from holding ES Ceramics Technology or give up 31.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JF Technology BHD vs. ES Ceramics Technology
Performance |
| Timeline |
| JF Technology BHD |
| ES Ceramics Technology |
JF Technology and ES Ceramics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JF Technology and ES Ceramics
The main advantage of trading using opposite JF Technology and ES Ceramics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JF Technology position performs unexpectedly, ES Ceramics 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 ES Ceramics will offset losses from the drop in ES Ceramics' long position.| JF Technology vs. Minetech Resources Bhd | JF Technology vs. Senheng New Retail | JF Technology vs. PIE Industrial Bhd | JF Technology vs. ONETECH SOLUTIONS HOLDINGS |
| ES Ceramics vs. Minetech Resources Bhd | ES Ceramics vs. Sunzen Biotech Bhd | ES Ceramics vs. Hengyuan Refining | ES Ceramics vs. Impiana Hotels Bhd |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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