Correlation Between JF Technology and Axiata Group
Can any of the company-specific risk be diversified away by investing in both JF Technology and Axiata 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 JF Technology and Axiata Group 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 Axiata Group Bhd, you can compare the effects of market volatilities on JF Technology and Axiata 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 JF Technology with a short position of Axiata Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of JF Technology and Axiata Group.
Diversification Opportunities for JF Technology and Axiata Group
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 0146 and Axiata is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding JF Technology BHD and Axiata Group Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axiata Group Bhd 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 Axiata Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axiata Group Bhd has no effect on the direction of JF Technology i.e., JF Technology and Axiata Group go up and down completely randomly.
Pair Corralation between JF Technology and Axiata Group
Assuming the 90 days trading horizon JF Technology BHD is expected to generate 8.01 times more return on investment than Axiata Group. However, JF Technology is 8.01 times more volatile than Axiata Group Bhd. It trades about 0.15 of its potential returns per unit of risk. Axiata Group Bhd is currently generating about 0.34 per unit of risk. If you would invest 58.00 in JF Technology BHD on September 13, 2024 and sell it today you would earn a total of 13.00 from holding JF Technology BHD or generate 22.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JF Technology BHD vs. Axiata Group Bhd
Performance |
| Timeline |
| JF Technology BHD |
| Axiata Group Bhd |
JF Technology and Axiata Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JF Technology and Axiata Group
The main advantage of trading using opposite JF Technology and Axiata Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JF Technology position performs unexpectedly, Axiata 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 Axiata Group will offset losses from the drop in Axiata Group's long position.| JF Technology vs. PIE Industrial Bhd | JF Technology vs. Kobay Tech Bhd | JF Technology vs. CB Industrial Product | JF Technology vs. MyTech Group 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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