Correlation Between Karmarts Public and JD Food
Can any of the company-specific risk be diversified away by investing in both Karmarts Public and JD Food 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 Karmarts Public and JD Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Karmarts Public and JD Food PCL, you can compare the effects of market volatilities on Karmarts Public and JD Food 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 Karmarts Public with a short position of JD Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Karmarts Public and JD Food.
Diversification Opportunities for Karmarts Public and JD Food
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Karmarts and JDF is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Karmarts Public and JD Food PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JD Food PCL and Karmarts Public 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 Karmarts Public are associated (or correlated) with JD Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JD Food PCL has no effect on the direction of Karmarts Public i.e., Karmarts Public and JD Food go up and down completely randomly.
Pair Corralation between Karmarts Public and JD Food
Assuming the 90 days trading horizon Karmarts Public is expected to generate 2.73 times less return on investment than JD Food. In addition to that, Karmarts Public is 1.92 times more volatile than JD Food PCL. It trades about 0.01 of its total potential returns per unit of risk. JD Food PCL is currently generating about 0.03 per unit of volatility. If you would invest 202.00 in JD Food PCL on September 4, 2024 and sell it today you would earn a total of 2.00 from holding JD Food PCL or generate 0.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Karmarts Public vs. JD Food PCL
Performance |
| Timeline |
| Karmarts Public |
| JD Food PCL |
Karmarts Public and JD Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Karmarts Public and JD Food
The main advantage of trading using opposite Karmarts Public and JD Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Karmarts Public position performs unexpectedly, JD Food 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 JD Food will offset losses from the drop in JD Food's long position.| Karmarts Public vs. Airports of Thailand | Karmarts Public vs. PTT Public | Karmarts Public vs. Bangkok Dusit Medical | Karmarts Public vs. Kasikornbank Public |
| JD Food vs. Kingsmen CMTI Public | JD Food vs. Hydrotek Public | JD Food vs. Karmarts Public | JD Food vs. KC Metalsheet 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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