Correlation Between RHB Bank and JF Technology
Can any of the company-specific risk be diversified away by investing in both RHB Bank and JF Technology 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 RHB Bank and JF Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RHB Bank Bhd and JF Technology BHD, you can compare the effects of market volatilities on RHB Bank and JF Technology 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 RHB Bank with a short position of JF Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of RHB Bank and JF Technology.
Diversification Opportunities for RHB Bank and JF Technology
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between RHB and 0146 is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding RHB Bank Bhd and JF Technology BHD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JF Technology BHD and RHB Bank 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 RHB Bank Bhd are associated (or correlated) with JF Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JF Technology BHD has no effect on the direction of RHB Bank i.e., RHB Bank and JF Technology go up and down completely randomly.
Pair Corralation between RHB Bank and JF Technology
Assuming the 90 days trading horizon RHB Bank Bhd is expected to generate 0.28 times more return on investment than JF Technology. However, RHB Bank Bhd is 3.63 times less risky than JF Technology. It trades about 0.09 of its potential returns per unit of risk. JF Technology BHD is currently generating about -0.02 per unit of risk. If you would invest 505.00 in RHB Bank Bhd on August 30, 2024 and sell it today you would earn a total of 173.00 from holding RHB Bank Bhd or generate 34.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RHB Bank Bhd vs. JF Technology BHD
Performance |
| Timeline |
| RHB Bank Bhd |
| JF Technology BHD |
RHB Bank and JF Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RHB Bank and JF Technology
The main advantage of trading using opposite RHB Bank and JF Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RHB Bank position performs unexpectedly, JF Technology 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 JF Technology will offset losses from the drop in JF Technology's long position.| RHB Bank vs. IHH Healthcare Bhd | RHB Bank vs. FARM FRESH BERHAD | RHB Bank vs. Southern Steel Bhd | RHB Bank vs. Ho Hup Construction |
| JF Technology vs. Minetech Resources Bhd | JF Technology vs. Senheng New Retail | JF Technology vs. PIE Industrial Bhd | JF Technology vs. ONETECH SOLUTIONS HOLDINGS |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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