Correlation Between JD Food and ABSOLUTE CLEAN
Can any of the company-specific risk be diversified away by investing in both JD Food and ABSOLUTE CLEAN 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 ABSOLUTE CLEAN 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 ABSOLUTE CLEAN ENERGY, you can compare the effects of market volatilities on JD Food and ABSOLUTE CLEAN 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 ABSOLUTE CLEAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Food and ABSOLUTE CLEAN.
Diversification Opportunities for JD Food and ABSOLUTE CLEAN
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between JDF and ABSOLUTE is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding JD Food PCL and ABSOLUTE CLEAN ENERGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABSOLUTE CLEAN ENERGY 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 ABSOLUTE CLEAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABSOLUTE CLEAN ENERGY has no effect on the direction of JD Food i.e., JD Food and ABSOLUTE CLEAN go up and down completely randomly.
Pair Corralation between JD Food and ABSOLUTE CLEAN
Assuming the 90 days trading horizon JD Food PCL is expected to generate 0.98 times more return on investment than ABSOLUTE CLEAN. However, JD Food PCL is 1.02 times less risky than ABSOLUTE CLEAN. It trades about -0.01 of its potential returns per unit of risk. ABSOLUTE CLEAN ENERGY is currently generating about -0.08 per unit of risk. If you would invest 233.00 in JD Food PCL on August 25, 2024 and sell it today you would lose (23.00) from holding JD Food PCL or give up 9.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD Food PCL vs. ABSOLUTE CLEAN ENERGY
Performance |
| Timeline |
| JD Food PCL |
| ABSOLUTE CLEAN ENERGY |
JD Food and ABSOLUTE CLEAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Food and ABSOLUTE CLEAN
The main advantage of trading using opposite JD Food and ABSOLUTE CLEAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Food position performs unexpectedly, ABSOLUTE CLEAN 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 ABSOLUTE CLEAN will offset losses from the drop in ABSOLUTE CLEAN's long position.| JD Food vs. Chamni Eye PCL | JD Food vs. Siam Global House | JD Food vs. The Erawan Group | JD Food vs. Ditto Public |
| ABSOLUTE CLEAN vs. BCPG Public | ABSOLUTE CLEAN vs. CK Power Public | ABSOLUTE CLEAN vs. TPI Polene Power | ABSOLUTE CLEAN vs. Earth Tech Environment |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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