Correlation Between JD Food and Krung Thai
Can any of the company-specific risk be diversified away by investing in both JD Food and Krung Thai 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 Krung Thai 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 Krung Thai Bank, you can compare the effects of market volatilities on JD Food and Krung Thai 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 Krung Thai. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Food and Krung Thai.
Diversification Opportunities for JD Food and Krung Thai
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JDF and Krung is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding JD Food PCL and Krung Thai Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Krung Thai Bank 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 Krung Thai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Krung Thai Bank has no effect on the direction of JD Food i.e., JD Food and Krung Thai go up and down completely randomly.
Pair Corralation between JD Food and Krung Thai
Assuming the 90 days trading horizon JD Food PCL is expected to under-perform the Krung Thai. In addition to that, JD Food is 1.73 times more volatile than Krung Thai Bank. It trades about -0.09 of its total potential returns per unit of risk. Krung Thai Bank is currently generating about 0.11 per unit of volatility. If you would invest 1,670 in Krung Thai Bank on September 3, 2024 and sell it today you would earn a total of 330.00 from holding Krung Thai Bank or generate 19.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD Food PCL vs. Krung Thai Bank
Performance |
| Timeline |
| JD Food PCL |
| Krung Thai Bank |
JD Food and Krung Thai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Food and Krung Thai
The main advantage of trading using opposite JD Food and Krung Thai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Food position performs unexpectedly, Krung Thai 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 Krung Thai will offset losses from the drop in Krung Thai'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 |
| Krung Thai vs. The Siam Commercial | Krung Thai vs. Thai Oil Public | Krung Thai vs. Thai Union Group | Krung Thai vs. Kasikornbank 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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