Correlation Between JD Food and Ichitan Group
Can any of the company-specific risk be diversified away by investing in both JD Food and Ichitan Group 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 Ichitan Group 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 Ichitan Group Public, you can compare the effects of market volatilities on JD Food and Ichitan Group 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 Ichitan Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Food and Ichitan Group.
Diversification Opportunities for JD Food and Ichitan Group
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JDF and Ichitan is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding JD Food PCL and Ichitan Group Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ichitan Group 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 Ichitan Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ichitan Group Public has no effect on the direction of JD Food i.e., JD Food and Ichitan Group go up and down completely randomly.
Pair Corralation between JD Food and Ichitan Group
Assuming the 90 days trading horizon JD Food PCL is expected to generate 0.68 times more return on investment than Ichitan Group. However, JD Food PCL is 1.47 times less risky than Ichitan Group. It trades about -0.21 of its potential returns per unit of risk. Ichitan Group Public is currently generating about -0.17 per unit of risk. If you would invest 216.00 in JD Food PCL on September 12, 2024 and sell it today you would lose (10.00) from holding JD Food PCL or give up 4.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD Food PCL vs. Ichitan Group Public
Performance |
| Timeline |
| JD Food PCL |
| Ichitan Group Public |
JD Food and Ichitan Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Food and Ichitan Group
The main advantage of trading using opposite JD Food and Ichitan Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Food position performs unexpectedly, Ichitan Group 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 Ichitan Group will offset losses from the drop in Ichitan Group's long position.| JD Food vs. Thai Union Group | JD Food vs. Thai Union Group | JD Food vs. Thai President Foods | JD Food vs. Thai Vegetable Oil |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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