Correlation Between JF Technology and SFP Tech
Can any of the company-specific risk be diversified away by investing in both JF Technology and SFP Tech 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 SFP Tech 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 SFP Tech Holdings, you can compare the effects of market volatilities on JF Technology and SFP Tech 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 SFP Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of JF Technology and SFP Tech.
Diversification Opportunities for JF Technology and SFP Tech
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between 0146 and SFP is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding JF Technology BHD and SFP Tech Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SFP Tech Holdings 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 SFP Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SFP Tech Holdings has no effect on the direction of JF Technology i.e., JF Technology and SFP Tech go up and down completely randomly.
Pair Corralation between JF Technology and SFP Tech
Assuming the 90 days trading horizon JF Technology BHD is expected to under-perform the SFP Tech. In addition to that, JF Technology is 1.06 times more volatile than SFP Tech Holdings. It trades about -0.27 of its total potential returns per unit of risk. SFP Tech Holdings is currently generating about 0.21 per unit of volatility. If you would invest 61.00 in SFP Tech Holdings on September 4, 2024 and sell it today you would earn a total of 7.00 from holding SFP Tech Holdings or generate 11.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JF Technology BHD vs. SFP Tech Holdings
Performance |
| Timeline |
| JF Technology BHD |
| SFP Tech Holdings |
JF Technology and SFP Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JF Technology and SFP Tech
The main advantage of trading using opposite JF Technology and SFP Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JF Technology position performs unexpectedly, SFP Tech 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 SFP Tech will offset losses from the drop in SFP Tech's long position.The idea behind JF Technology BHD and SFP Tech Holdings 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.| SFP Tech vs. Tex Cycle Technology | SFP Tech vs. Computer Forms Bhd | SFP Tech vs. Melewar Industrial Group | SFP Tech vs. PIE Industrial 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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