Correlation Between Pato Chemical and JD Food
Can any of the company-specific risk be diversified away by investing in both Pato Chemical 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 Pato Chemical and JD Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pato Chemical Industry and JD Food PCL, you can compare the effects of market volatilities on Pato Chemical 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 Pato Chemical with a short position of JD Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pato Chemical and JD Food.
Diversification Opportunities for Pato Chemical and JD Food
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pato and JDF is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Pato Chemical Industry 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 Pato Chemical 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 Pato Chemical Industry 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 Pato Chemical i.e., Pato Chemical and JD Food go up and down completely randomly.
Pair Corralation between Pato Chemical and JD Food
Assuming the 90 days trading horizon Pato Chemical Industry is expected to under-perform the JD Food. But the stock apears to be less risky and, when comparing its historical volatility, Pato Chemical Industry is 2.32 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 0.0 of returns per unit of risk over similar time horizon. If you would invest 213.00 in JD Food PCL on December 3, 2024 and sell it today you would lose (13.00) from holding JD Food PCL or give up 6.1% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 96.88% |
Values | Daily Returns |
Pato Chemical Industry vs. JD Food PCL
Performance |
Timeline |
Pato Chemical Industry |
JD Food PCL |
Pato Chemical and JD Food Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Pato Chemical and JD Food
The main advantage of trading using opposite Pato Chemical and JD Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pato Chemical 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 Pato Chemical Industry 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.JD Food vs. 2S Metal Public | JD Food vs. Grande Hospitality Real | JD Food vs. Asia Metal Public | JD Food vs. Siam Wellness Group |
Check out your portfolio center.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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
Global Correlations Find global opportunities by holding instruments from different markets |