Correlation Between JD Food and 2S Metal
Can any of the company-specific risk be diversified away by investing in both JD Food and 2S Metal 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 JD Food and 2S Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JD Food PCL and 2S Metal Public, you can compare the effects of market volatilities on JD Food and 2S Metal 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 JD Food with a short position of 2S Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Food and 2S Metal.
Diversification Opportunities for JD Food and 2S Metal
Good diversification
The 3 months correlation between JDF and 2S Metal is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding JD Food PCL and 2S Metal Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 2S Metal Public and JD Food 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 JD Food PCL are associated (or correlated) with 2S Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 2S Metal Public has no effect on the direction of JD Food i.e., JD Food and 2S Metal go up and down completely randomly.
Pair Corralation between JD Food and 2S Metal
Assuming the 90 days trading horizon JD Food PCL is expected to generate 1.32 times more return on investment than 2S Metal. However, JD Food is 1.32 times more volatile than 2S Metal Public. It trades about 0.03 of its potential returns per unit of risk. 2S Metal Public is currently generating about -0.18 per unit of risk. If you would invest 202.00 in JD Food PCL on August 29, 2024 and sell it today you would earn a total of 2.00 from holding JD Food PCL or generate 0.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
JD Food PCL vs. 2S Metal Public
Performance |
| Timeline |
| JD Food PCL |
| 2S Metal Public |
JD Food and 2S Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Food and 2S Metal
The main advantage of trading using opposite JD Food and 2S Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Food position performs unexpectedly, 2S Metal 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 2S Metal will offset losses from the drop in 2S Metal's long position.| JD Food vs. Carabao Group Public | JD Food vs. Jay Mart Public | JD Food vs. Gulf Energy Development | JD Food vs. KCE Electronics Public |
| 2S Metal vs. MCS Steel Public | 2S Metal vs. Hwa Fong Rubber | 2S Metal vs. Haad Thip Public | 2S Metal vs. SCG PACKAGING PCL NVDR |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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