Correlation Between Exotic Food and Jay Mart
Can any of the company-specific risk be diversified away by investing in both Exotic Food and Jay Mart 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 Exotic Food and Jay Mart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exotic Food Public and Jay Mart Public, you can compare the effects of market volatilities on Exotic Food and Jay Mart 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 Exotic Food with a short position of Jay Mart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exotic Food and Jay Mart.
Diversification Opportunities for Exotic Food and Jay Mart
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Exotic and Jay is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Exotic Food Public and Jay Mart Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jay Mart Public and Exotic 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 Exotic Food Public are associated (or correlated) with Jay Mart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jay Mart Public has no effect on the direction of Exotic Food i.e., Exotic Food and Jay Mart go up and down completely randomly.
Pair Corralation between Exotic Food and Jay Mart
Assuming the 90 days horizon Exotic Food Public is expected to generate 0.85 times more return on investment than Jay Mart. However, Exotic Food Public is 1.18 times less risky than Jay Mart. It trades about 0.05 of its potential returns per unit of risk. Jay Mart Public is currently generating about 0.0 per unit of risk. If you would invest 1,256 in Exotic Food Public on August 29, 2024 and sell it today you would earn a total of 764.00 from holding Exotic Food Public or generate 60.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exotic Food Public vs. Jay Mart Public
Performance |
| Timeline |
| Exotic Food Public |
| Jay Mart Public |
Exotic Food and Jay Mart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exotic Food and Jay Mart
The main advantage of trading using opposite Exotic Food and Jay Mart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exotic Food position performs unexpectedly, Jay Mart 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 Jay Mart will offset losses from the drop in Jay Mart's long position.| Exotic Food vs. Mega Lifesciences Public | Exotic Food vs. Com7 PCL | Exotic Food vs. Thai Union Group | Exotic Food vs. Jay Mart Public |
| Jay Mart vs. JMT Network Services | Jay Mart vs. Com7 PCL | Jay Mart vs. KCE Electronics Public | Jay Mart vs. Singer Thailand 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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