Correlation Between Kiatnakin Phatra and JD Food

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

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

Diversification Opportunities for Kiatnakin Phatra and JD Food

-0.21

Correlation Coefficient

Kiatnakin Phatra  JD Food

Very good diversification

The 3 months correlation between Kiatnakin and JDF is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Kiatnakin Phatra Bank 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 Kiatnakin Phatra 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 Kiatnakin Phatra Bank 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 Kiatnakin Phatra i.e., Kiatnakin Phatra and JD Food go up and down completely randomly.

Pair Corralation between Kiatnakin Phatra and JD Food

Assuming the 90 days trading horizon Kiatnakin Phatra Bank is expected to under-perform the JD Food. But the stock apears to be less risky and, when comparing its historical volatility, Kiatnakin Phatra Bank is 1.0 times less risky than JD Food. The stock trades about -0.02 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  202.00  in JD Food PCL on October 26, 2024 and sell it today you would lose (3.00) from holding JD Food PCL or give up 1.49% of portfolio value over 90 days.

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

Kiatnakin Phatra Bank  vs.  JD Food PCL

Kiatnakin Phatra Bank

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kiatnakin Phatra Bank has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Kiatnakin Phatra is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional 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 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 Kiatnakin Phatra and JD Food

The main advantage of trading using opposite Kiatnakin Phatra and JD Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kiatnakin Phatra 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 Kiatnakin Phatra Bank 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.