Correlation Between Beauty Community and Jasmine International
Can any of the company-specific risk be diversified away by investing in both Beauty Community and Jasmine International 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 Beauty Community and Jasmine International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beauty Community Public and Jasmine International Public, you can compare the effects of market volatilities on Beauty Community and Jasmine International 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 Beauty Community with a short position of Jasmine International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beauty Community and Jasmine International.
Diversification Opportunities for Beauty Community and Jasmine International
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Beauty and Jasmine is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Beauty Community Public and Jasmine International Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jasmine International and Beauty Community 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 Beauty Community Public are associated (or correlated) with Jasmine International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jasmine International has no effect on the direction of Beauty Community i.e., Beauty Community and Jasmine International go up and down completely randomly.
Pair Corralation between Beauty Community and Jasmine International
Assuming the 90 days trading horizon Beauty Community Public is expected to generate 16.11 times more return on investment than Jasmine International. However, Beauty Community is 16.11 times more volatile than Jasmine International Public. It trades about 0.05 of its potential returns per unit of risk. Jasmine International Public is currently generating about 0.06 per unit of risk. If you would invest 49.00 in Beauty Community Public on September 1, 2024 and sell it today you would lose (9.00) from holding Beauty Community Public or give up 18.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.62% |
| Values | Daily Returns |
Beauty Community Public vs. Jasmine International Public
Performance |
| Timeline |
| Beauty Community Public |
| Jasmine International |
Beauty Community and Jasmine International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beauty Community and Jasmine International
The main advantage of trading using opposite Beauty Community and Jasmine International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beauty Community position performs unexpectedly, Jasmine International 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 Jasmine International will offset losses from the drop in Jasmine International's long position.| Beauty Community vs. CP ALL Public | Beauty Community vs. Airports of Thailand | Beauty Community vs. Bangkok Dusit Medical | Beauty Community vs. Home Product Center |
| Jasmine International vs. True Public | Jasmine International vs. Land and Houses | Jasmine International vs. Advanced Info Service | Jasmine International vs. Krung Thai Bank |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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