Correlation Between JD Food and KCE Electronics
Can any of the company-specific risk be diversified away by investing in both JD Food and KCE Electronics 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 KCE Electronics 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 KCE Electronics Public, you can compare the effects of market volatilities on JD Food and KCE Electronics 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 KCE Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Food and KCE Electronics.
Diversification Opportunities for JD Food and KCE Electronics
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between JDF and KCE is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding JD Food PCL and KCE Electronics Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KCE Electronics 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 KCE Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KCE Electronics Public has no effect on the direction of JD Food i.e., JD Food and KCE Electronics go up and down completely randomly.
Pair Corralation between JD Food and KCE Electronics
Assuming the 90 days trading horizon JD Food PCL is expected to generate 0.92 times more return on investment than KCE Electronics. However, JD Food PCL is 1.09 times less risky than KCE Electronics. It trades about -0.02 of its potential returns per unit of risk. KCE Electronics Public is currently generating about -0.04 per unit of risk. If you would invest 287.00 in JD Food PCL on August 29, 2024 and sell it today you would lose (83.00) from holding JD Food PCL or give up 28.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD Food PCL vs. KCE Electronics Public
Performance |
| Timeline |
| JD Food PCL |
| KCE Electronics Public |
JD Food and KCE Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Food and KCE Electronics
The main advantage of trading using opposite JD Food and KCE Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Food position performs unexpectedly, KCE Electronics 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 KCE Electronics will offset losses from the drop in KCE Electronics' 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 |
| KCE Electronics vs. AP Public | KCE Electronics vs. Jasmine International Public | KCE Electronics vs. Asia Plus Group | KCE Electronics vs. Bangchak 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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