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

-0.12

Correlation Coefficient

Thai President  JD Food

Good diversification

The 3 months correlation between Thai and JDF is -0.12. 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 under-perform the JD Food. But the stock apears to be less risky and, when comparing its historical volatility, Thai President Foods is 2.68 times less risky than JD Food. The stock trades about -0.03 of its potential returns per unit of risk. The JD Food PCL is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  225.00  in JD Food PCL on September 14, 2024 and sell it today you would lose (19.00) from holding JD Food PCL or give up 8.44% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Thai President Foods  vs.  JD Food PCL

Thai President Foods

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Thai President Foods are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong primary indicators, Thai President is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

JD Food PCL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JD Food PCL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's technical and fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

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.

The idea behind Thai President Foods and JD Food PCL 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.

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.