Correlation Between Home Product and Jay Mart
Can any of the company-specific risk be diversified away by investing in both Home Product and Jay Mart 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 Home Product and Jay Mart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Product Center and Jay Mart Public, you can compare the effects of market volatilities on Home Product and Jay Mart 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 Home Product with a short position of Jay Mart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Product and Jay Mart.
Diversification Opportunities for Home Product and Jay Mart
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Home and Jay is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Home Product Center and Jay Mart Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jay Mart Public and Home Product 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 Home Product Center are associated (or correlated) with Jay Mart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jay Mart Public has no effect on the direction of Home Product i.e., Home Product and Jay Mart go up and down completely randomly.
Pair Corralation between Home Product and Jay Mart
Assuming the 90 days trading horizon Home Product Center is expected to generate 0.84 times more return on investment than Jay Mart. However, Home Product Center is 1.19 times less risky than Jay Mart. It trades about 0.05 of its potential returns per unit of risk. Jay Mart Public is currently generating about -0.1 per unit of risk. If you would invest 919.00 in Home Product Center on August 28, 2024 and sell it today you would earn a total of 46.00 from holding Home Product Center or generate 5.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Home Product Center vs. Jay Mart Public
Performance |
| Timeline |
| Home Product Center |
| Jay Mart Public |
Home Product and Jay Mart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Product and Jay Mart
The main advantage of trading using opposite Home Product and Jay Mart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Product position performs unexpectedly, Jay Mart 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 Jay Mart will offset losses from the drop in Jay Mart's long position.| Home Product vs. SCB X Public | Home Product vs. Kasikornbank Public | Home Product vs. PTT Public | Home Product vs. Kasikornbank Public |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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