Correlation Between JD Food and Thai Union

Can any of the company-specific risk be diversified away by investing in both JD Food and Thai Union 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 Thai Union 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 Thai Union Group, you can compare the effects of market volatilities on JD Food and Thai Union 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 Thai Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Food and Thai Union.

Diversification Opportunities for JD Food and Thai Union

0.23

Correlation Coefficient

JD Food  Thai Union

Modest diversification

The 3 months correlation between JDF and Thai is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding JD Food PCL and Thai Union Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Union Group 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 Thai Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Union Group has no effect on the direction of JD Food i.e., JD Food and Thai Union go up and down completely randomly.

Pair Corralation between JD Food and Thai Union

Assuming the 90 days trading horizon JD Food PCL is expected to generate 0.65 times more return on investment than Thai Union. However, JD Food PCL is 1.53 times less risky than Thai Union. It trades about -0.02 of its potential returns per unit of risk. Thai Union Group is currently generating about -0.09 per unit of risk. If you would invest  204.00  in JD Food PCL on December 27, 2024 and sell it today you would lose (4.00) from holding JD Food PCL or give up 1.96% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

JD Food PCL  vs.  Thai Union Group

JD Food PCL

Risk-Adjusted Performance

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 quite persistent technical and fundamental indicators, JD Food is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Thai Union Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Thai Union Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's fundamental drivers 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 JD Food and Thai Union

The main advantage of trading using opposite JD Food and Thai Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Food position performs unexpectedly, Thai Union 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 Thai Union will offset losses from the drop in Thai Union's long position.

The idea behind JD Food PCL and Thai Union Group 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.

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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.