Correlation Between Ichitan Group and President Bakery
Can any of the company-specific risk be diversified away by investing in both Ichitan Group and President Bakery 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 Ichitan Group and President Bakery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ichitan Group Public and President Bakery Public, you can compare the effects of market volatilities on Ichitan Group and President Bakery 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 Ichitan Group with a short position of President Bakery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ichitan Group and President Bakery.
Diversification Opportunities for Ichitan Group and President Bakery
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ichitan and President is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Ichitan Group Public and President Bakery Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on President Bakery Public and Ichitan Group 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 Ichitan Group Public are associated (or correlated) with President Bakery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of President Bakery Public has no effect on the direction of Ichitan Group i.e., Ichitan Group and President Bakery go up and down completely randomly.
Pair Corralation between Ichitan Group and President Bakery
Assuming the 90 days trading horizon Ichitan Group Public is expected to generate 3.04 times more return on investment than President Bakery. However, Ichitan Group is 3.04 times more volatile than President Bakery Public. It trades about 0.05 of its potential returns per unit of risk. President Bakery Public is currently generating about -0.03 per unit of risk. If you would invest 971.00 in Ichitan Group Public on September 26, 2024 and sell it today you would earn a total of 479.00 from holding Ichitan Group Public or generate 49.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 99.79% |
Values | Daily Returns |
Ichitan Group Public vs. President Bakery Public
Performance |
Timeline |
Ichitan Group Public |
President Bakery Public |
Ichitan Group and President Bakery Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ichitan Group and President Bakery
The main advantage of trading using opposite Ichitan Group and President Bakery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ichitan Group position performs unexpectedly, President Bakery 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 President Bakery will offset losses from the drop in President Bakery's long position.The idea behind Ichitan Group Public and President Bakery Public 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.President Bakery vs. GFPT Public | President Bakery vs. Thai Union Group | President Bakery vs. Com7 PCL | President Bakery vs. Ichitan Group 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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