Correlation Between JF Technology and Computer Forms
Can any of the company-specific risk be diversified away by investing in both JF Technology and Computer Forms 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 Computer Forms 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 Computer Forms Bhd, you can compare the effects of market volatilities on JF Technology and Computer Forms 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 Computer Forms. Check out your portfolio center. Please also check ongoing floating volatility patterns of JF Technology and Computer Forms.
Diversification Opportunities for JF Technology and Computer Forms
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 0146 and Computer is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding JF Technology BHD and Computer Forms Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Computer Forms 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 Computer Forms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Computer Forms Bhd has no effect on the direction of JF Technology i.e., JF Technology and Computer Forms go up and down completely randomly.
Pair Corralation between JF Technology and Computer Forms
Assuming the 90 days trading horizon JF Technology BHD is expected to under-perform the Computer Forms. But the stock apears to be less risky and, when comparing its historical volatility, JF Technology BHD is 1.97 times less risky than Computer Forms. The stock trades about -0.08 of its potential returns per unit of risk. The Computer Forms Bhd is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 17.00 in Computer Forms Bhd on August 26, 2024 and sell it today you would lose (5.00) from holding Computer Forms Bhd or give up 29.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JF Technology BHD vs. Computer Forms Bhd
Performance |
| Timeline |
| JF Technology BHD |
| Computer Forms Bhd |
JF Technology and Computer Forms Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JF Technology and Computer Forms
The main advantage of trading using opposite JF Technology and Computer Forms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JF Technology position performs unexpectedly, Computer Forms 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 Computer Forms will offset losses from the drop in Computer Forms' long position.The idea behind JF Technology BHD and Computer Forms 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.| Computer Forms vs. Digistar Bhd | Computer Forms vs. Minetech Resources Bhd | Computer Forms vs. OpenSys M Bhd | Computer Forms vs. Insas 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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