Correlation Between Jay Mart and Thai Vegetable

Can any of the company-specific risk be diversified away by investing in both Jay Mart and Thai Vegetable 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 Jay Mart and Thai Vegetable into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Jay Mart Public and Thai Vegetable Oil, you can compare the effects of market volatilities on Jay Mart and Thai Vegetable 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 Jay Mart with a short position of Thai Vegetable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jay Mart and Thai Vegetable.

Diversification Opportunities for Jay Mart and Thai Vegetable

0.27

Correlation Coefficient

Jay Mart  Thai Vegetable

Modest diversification

The 3 months correlation between Jay and Thai is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Jay Mart Public and Thai Vegetable Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Vegetable Oil and Jay Mart 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 Jay Mart Public are associated (or correlated) with Thai Vegetable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Vegetable Oil has no effect on the direction of Jay Mart i.e., Jay Mart and Thai Vegetable go up and down completely randomly.

Pair Corralation between Jay Mart and Thai Vegetable

Assuming the 90 days trading horizon Jay Mart Public is expected to under-perform the Thai Vegetable. In addition to that, Jay Mart is 2.22 times more volatile than Thai Vegetable Oil. It trades about -0.36 of its total potential returns per unit of risk. Thai Vegetable Oil is currently generating about -0.2 per unit of volatility. If you would invest  2,270  in Thai Vegetable Oil on October 9, 2024 and sell it today you would lose (70.00) from holding Thai Vegetable Oil or give up 3.08% of portfolio value over 90 days.

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

Jay Mart Public  vs.  Thai Vegetable Oil

Jay Mart Public

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jay Mart Public are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Jay Mart reported solid returns over the last few months and may actually be approaching a breakup point.

Thai Vegetable Oil

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thai Vegetable Oil has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic 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 Jay Mart and Thai Vegetable

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

The idea behind Jay Mart Public and Thai Vegetable Oil 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.