Correlation Between Krung Thai and JD Food
Can any of the company-specific risk be diversified away by investing in both Krung Thai 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 Krung Thai and JD Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Krung Thai Bank and JD Food PCL, you can compare the effects of market volatilities on Krung Thai 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 Krung Thai with a short position of JD Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Krung Thai and JD Food.
Diversification Opportunities for Krung Thai and JD Food
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Krung and JDF is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Krung Thai Bank 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 Krung Thai 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 Krung Thai Bank 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 Krung Thai i.e., Krung Thai and JD Food go up and down completely randomly.
Pair Corralation between Krung Thai and JD Food
Assuming the 90 days trading horizon Krung Thai Bank is expected to under-perform the JD Food. But the stock apears to be less risky and, when comparing its historical volatility, Krung Thai Bank is 2.45 times less risky than JD Food. The stock trades about -0.14 of its potential returns per unit of risk. The JD Food PCL is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 200.00 in JD Food PCL on September 1, 2024 and sell it today you would earn a total of 4.00 from holding JD Food PCL or generate 2.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Krung Thai Bank vs. JD Food PCL
Performance |
| Timeline |
| Krung Thai Bank |
| JD Food PCL |
Krung Thai and JD Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Krung Thai and JD Food
The main advantage of trading using opposite Krung Thai and JD Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Krung Thai 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.| Krung Thai vs. The Siam Commercial | Krung Thai vs. Thai Oil Public | Krung Thai vs. Thai Union Group | Krung Thai vs. Kasikornbank Public |
| JD Food vs. Mega Lifesciences Public | JD Food vs. Com7 PCL | JD Food vs. Thai Union Group | JD Food vs. Jay Mart 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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