Correlation Between JD Food and Porn Prom
Can any of the company-specific risk be diversified away by investing in both JD Food and Porn Prom 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 JD Food and Porn Prom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JD Food PCL and Porn Prom Metal, you can compare the effects of market volatilities on JD Food and Porn Prom 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 JD Food with a short position of Porn Prom. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Food and Porn Prom.
Diversification Opportunities for JD Food and Porn Prom
Average diversification
The 3 months correlation between JDF and Porn is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding JD Food PCL and Porn Prom Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Porn Prom Metal and JD 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 JD Food PCL are associated (or correlated) with Porn Prom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Porn Prom Metal has no effect on the direction of JD Food i.e., JD Food and Porn Prom go up and down completely randomly.
Pair Corralation between JD Food and Porn Prom
Assuming the 90 days trading horizon JD Food PCL is expected to generate 0.45 times more return on investment than Porn Prom. However, JD Food PCL is 2.21 times less risky than Porn Prom. It trades about -0.07 of its potential returns per unit of risk. Porn Prom Metal is currently generating about -0.1 per unit of risk. If you would invest 222.00 in JD Food PCL on September 14, 2024 and sell it today you would lose (16.00) from holding JD Food PCL or give up 7.21% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
JD Food PCL vs. Porn Prom Metal
Performance |
Timeline |
JD Food PCL |
Porn Prom Metal |
JD Food and Porn Prom Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with JD Food and Porn Prom
The main advantage of trading using opposite JD Food and Porn Prom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Food position performs unexpectedly, Porn Prom 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 Porn Prom will offset losses from the drop in Porn Prom's long position.JD Food vs. Thai Union Group | JD Food vs. Thai Union Group | JD Food vs. Thai President Foods | JD Food vs. Thai Vegetable Oil |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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