Correlation Between JD Food and Healthlead Public
Can any of the company-specific risk be diversified away by investing in both JD Food and Healthlead Public 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 Healthlead Public 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 Healthlead Public, you can compare the effects of market volatilities on JD Food and Healthlead Public 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 Healthlead Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Food and Healthlead Public.
Diversification Opportunities for JD Food and Healthlead Public
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between JDF and Healthlead is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding JD Food PCL and Healthlead Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthlead 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 Healthlead Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healthlead Public has no effect on the direction of JD Food i.e., JD Food and Healthlead Public go up and down completely randomly.
Pair Corralation between JD Food and Healthlead Public
Assuming the 90 days trading horizon JD Food PCL is expected to generate 0.98 times more return on investment than Healthlead Public. However, JD Food PCL is 1.02 times less risky than Healthlead Public. It trades about -0.09 of its potential returns per unit of risk. Healthlead Public is currently generating about -0.1 per unit of risk. If you would invest 276.00 in JD Food PCL on September 3, 2024 and sell it today you would lose (72.00) from holding JD Food PCL or give up 26.09% 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. Healthlead Public
Performance |
| Timeline |
| JD Food PCL |
| Healthlead Public |
JD Food and Healthlead Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Food and Healthlead Public
The main advantage of trading using opposite JD Food and Healthlead Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Food position performs unexpectedly, Healthlead Public 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 Healthlead Public will offset losses from the drop in Healthlead Public's long position.| JD Food vs. Nova Organic PCL | JD Food vs. TISCO Financial Group | JD Food vs. Thai Coating Industrial | JD Food vs. Central Retail |
| Healthlead Public vs. II Group Public | Healthlead Public vs. Dohome Public | Healthlead Public vs. Humanica Public | Healthlead Public vs. Jay Mart Public |
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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