Correlation Between MyTech Group and JF Technology
Can any of the company-specific risk be diversified away by investing in both MyTech Group 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 MyTech Group and JF Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MyTech Group Bhd and JF Technology BHD, you can compare the effects of market volatilities on MyTech Group 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 MyTech Group with a short position of JF Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of MyTech Group and JF Technology.
Diversification Opportunities for MyTech Group and JF Technology
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between MyTech and 0146 is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding MyTech Group 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 MyTech Group 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 MyTech Group 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 MyTech Group i.e., MyTech Group and JF Technology go up and down completely randomly.
Pair Corralation between MyTech Group and JF Technology
Assuming the 90 days trading horizon MyTech Group Bhd is expected to generate 0.5 times more return on investment than JF Technology. However, MyTech Group Bhd is 2.01 times less risky than JF Technology. It trades about -0.32 of its potential returns per unit of risk. JF Technology BHD is currently generating about -0.21 per unit of risk. If you would invest 46.00 in MyTech Group Bhd on August 28, 2024 and sell it today you would lose (4.00) from holding MyTech Group Bhd or give up 8.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MyTech Group Bhd vs. JF Technology BHD
Performance |
| Timeline |
| MyTech Group Bhd |
| JF Technology BHD |
MyTech Group and JF Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MyTech Group and JF Technology
The main advantage of trading using opposite MyTech Group and JF Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MyTech Group 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.The idea behind MyTech Group Bhd and JF Technology 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.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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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