Correlation Between Karmarts Public and JD Food

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

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

Diversification Opportunities for Karmarts Public and JD Food

0.12

Correlation Coefficient

Karmarts Public  JD Food

Average diversification

The 3 months correlation between Karmarts and JDF is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Karmarts 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 Karmarts Public 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 Karmarts 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 Karmarts Public i.e., Karmarts Public and JD Food go up and down completely randomly.

Pair Corralation between Karmarts Public and JD Food

Assuming the 90 days trading horizon Karmarts Public is expected to under-perform the JD Food. In addition to that, Karmarts Public is 2.66 times more volatile than JD Food PCL. It trades about -0.12 of its total potential returns per unit of risk. JD Food PCL is currently generating about -0.03 per unit of volatility. If you would invest  204.00  in JD Food PCL on December 30, 2024 and sell it today you would lose (5.00) from holding JD Food PCL or give up 2.45% of portfolio value over 90 days.

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

Karmarts Public  vs.  JD Food PCL

Karmarts Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Karmarts Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's primary indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

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 latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Karmarts Public and JD Food

The main advantage of trading using opposite Karmarts Public and JD Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Karmarts Public 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 Karmarts 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.