Correlation Between JD Food and Tipco Foods
Can any of the company-specific risk be diversified away by investing in both JD Food and Tipco Foods 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 Tipco Foods 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 Tipco Foods Public, you can compare the effects of market volatilities on JD Food and Tipco Foods 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 Tipco Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Food and Tipco Foods.
Diversification Opportunities for JD Food and Tipco Foods
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between JDF and Tipco is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding JD Food PCL and Tipco Foods Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tipco Foods Public 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 Tipco Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tipco Foods Public has no effect on the direction of JD Food i.e., JD Food and Tipco Foods go up and down completely randomly.
Pair Corralation between JD Food and Tipco Foods
Assuming the 90 days trading horizon JD Food PCL is expected to under-perform the Tipco Foods. In addition to that, JD Food is 3.39 times more volatile than Tipco Foods Public. It trades about -0.04 of its total potential returns per unit of risk. Tipco Foods Public is currently generating about 0.08 per unit of volatility. If you would invest 985.00 in Tipco Foods Public on September 15, 2024 and sell it today you would earn a total of 25.00 from holding Tipco Foods Public or generate 2.54% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
JD Food PCL vs. Tipco Foods Public
Performance |
Timeline |
JD Food PCL |
Tipco Foods Public |
JD Food and Tipco Foods Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with JD Food and Tipco Foods
The main advantage of trading using opposite JD Food and Tipco Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Food position performs unexpectedly, Tipco Foods 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 Tipco Foods will offset losses from the drop in Tipco Foods' long position.JD Food vs. K W Metal | JD Food vs. Namwiwat Medical | JD Food vs. Winnergy Medical Public | JD Food vs. City Steel Public |
Tipco Foods vs. GFPT Public | Tipco Foods vs. Dynasty Ceramic Public | Tipco Foods vs. Haad Thip Public | Tipco Foods vs. The Erawan Group |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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