Correlation Between Kingsmen CMTI and JD Food

Can any of the company-specific risk be diversified away by investing in both Kingsmen CMTI 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 Kingsmen CMTI and JD Food into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kingsmen CMTI Public and JD Food PCL, you can compare the effects of market volatilities on Kingsmen CMTI 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 Kingsmen CMTI with a short position of JD Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingsmen CMTI and JD Food.

Diversification Opportunities for Kingsmen CMTI and JD Food

-0.14

Correlation Coefficient

Kingsmen CMTI  JD Food

Good diversification

The 3 months correlation between Kingsmen and JDF is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Kingsmen CMTI Public 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 Kingsmen CMTI 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 Kingsmen CMTI Public 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 Kingsmen CMTI i.e., Kingsmen CMTI and JD Food go up and down completely randomly.

Pair Corralation between Kingsmen CMTI and JD Food

Given the investment horizon of 90 days Kingsmen CMTI Public is expected to generate 43.73 times more return on investment than JD Food. However, Kingsmen CMTI is 43.73 times more volatile than JD Food PCL. It trades about 0.08 of its potential returns per unit of risk. JD Food PCL is currently generating about -0.11 per unit of risk. If you would invest  94.00  in Kingsmen CMTI Public on September 5, 2024 and sell it today you would earn a total of  25.00  from holding Kingsmen CMTI Public or generate 26.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.19%
Values	Daily Returns

Kingsmen CMTI Public  vs.  JD Food PCL

Kingsmen CMTI Public

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kingsmen CMTI Public are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental drivers, Kingsmen CMTI may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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 Kingsmen CMTI and JD Food

The main advantage of trading using opposite Kingsmen CMTI and JD Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingsmen CMTI 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 Kingsmen CMTI Public 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.

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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.