Correlation Between Thai President and JD Food
Can any of the company-specific risk be diversified away by investing in both Thai President 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 Thai President and JD Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thai President Foods and JD Food PCL, you can compare the effects of market volatilities on Thai President 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 Thai President with a short position of JD Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai President and JD Food.
Diversification Opportunities for Thai President and JD Food
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Thai and JDF is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Thai President Foods 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 Thai President 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 Thai President Foods 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 Thai President i.e., Thai President and JD Food go up and down completely randomly.
Pair Corralation between Thai President and JD Food
Assuming the 90 days trading horizon Thai President Foods is expected to generate 0.23 times more return on investment than JD Food. However, Thai President Foods is 4.37 times less risky than JD Food. It trades about -0.02 of its potential returns per unit of risk. JD Food PCL is currently generating about -0.1 per unit of risk. If you would invest 20,346 in Thai President Foods on August 29, 2024 and sell it today you would lose (246.00) from holding Thai President Foods or give up 1.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.19% |
| Values | Daily Returns |
Thai President Foods vs. JD Food PCL
Performance |
| Timeline |
| Thai President Foods |
| JD Food PCL |
Thai President and JD Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai President and JD Food
The main advantage of trading using opposite Thai President and JD Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai President 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.| Thai President vs. Thai Union Group | Thai President vs. President Bakery Public | Thai President vs. MK Restaurant Group | Thai President vs. Carabao Group Public |
| JD Food vs. Carabao Group Public | JD Food vs. Jay Mart Public | JD Food vs. Gulf Energy Development | JD Food vs. KCE Electronics 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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