Correlation Between Ho Hup and JF Technology

Can any of the company-specific risk be diversified away by investing in both Ho Hup 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 Ho Hup and JF Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ho Hup Construction and JF Technology BHD, you can compare the effects of market volatilities on Ho Hup 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 Ho Hup with a short position of JF Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ho Hup and JF Technology.

Diversification Opportunities for Ho Hup and JF Technology

-0.26

Correlation Coefficient

Ho Hup  JF Technology

Very good diversification

The 3 months correlation between 5169 and 0146 is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Ho Hup Construction 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 Ho Hup 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 Ho Hup Construction 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 Ho Hup i.e., Ho Hup and JF Technology go up and down completely randomly.

Pair Corralation between Ho Hup and JF Technology

Assuming the 90 days trading horizon Ho Hup Construction is expected to under-perform the JF Technology. In addition to that, Ho Hup is 1.46 times more volatile than JF Technology BHD. It trades about -0.02 of its total potential returns per unit of risk. JF Technology BHD is currently generating about -0.01 per unit of volatility. If you would invest  77.00  in JF Technology BHD on December 1, 2024 and sell it today you would lose (24.00) from holding JF Technology BHD or give up 31.17% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Ho Hup Construction  vs.  JF Technology BHD

Ho Hup Construction

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ho Hup Construction has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

JF Technology BHD

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in JF Technology BHD are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, JF Technology disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ho Hup and JF Technology

The main advantage of trading using opposite Ho Hup and JF Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ho Hup 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 Ho Hup Construction 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.

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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.