Correlation Between Jay Mart and Thai Film

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Can any of the company-specific risk be diversified away by investing in both Jay Mart and Thai Film 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 Jay Mart and Thai Film into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jay Mart Public and Thai Film Industries, you can compare the effects of market volatilities on Jay Mart and Thai Film 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 Jay Mart with a short position of Thai Film. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jay Mart and Thai Film.

Diversification Opportunities for Jay Mart and Thai Film

-0.04
  Correlation Coefficient

Good diversification

The 3 months correlation between Jay and Thai is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Jay Mart Public and Thai Film Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Film Industries and Jay Mart 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 Jay Mart Public are associated (or correlated) with Thai Film. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Film Industries has no effect on the direction of Jay Mart i.e., Jay Mart and Thai Film go up and down completely randomly.

Pair Corralation between Jay Mart and Thai Film

Assuming the 90 days trading horizon Jay Mart Public is expected to generate 17.07 times more return on investment than Thai Film. However, Jay Mart is 17.07 times more volatile than Thai Film Industries. It trades about 0.14 of its potential returns per unit of risk. Thai Film Industries is currently generating about 0.01 per unit of risk. If you would invest  1,593  in Jay Mart Public on September 13, 2024 and sell it today you would lose (143.00) from holding Jay Mart Public or give up 8.98% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Jay Mart Public  vs.  Thai Film Industries

 Performance 
       Timeline  
Jay Mart Public 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Jay Mart Public are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Jay Mart reported solid returns over the last few months and may actually be approaching a breakup point.
Thai Film Industries 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Thai Film Industries are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward indicators, Thai Film may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Jay Mart and Thai Film Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Jay Mart and Thai Film

The main advantage of trading using opposite Jay Mart and Thai Film positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jay Mart position performs unexpectedly, Thai Film 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 Thai Film will offset losses from the drop in Thai Film's long position.
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The idea behind Jay Mart Public and Thai Film Industries pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.

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