Correlation Between Taokaenoi Food and Jay Mart

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

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

Diversification Opportunities for Taokaenoi Food and Jay Mart

0.21

Correlation Coefficient

Taokaenoi Food  Jay Mart

Modest diversification

The 3 months correlation between Taokaenoi and Jay is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Taokaenoi Food Marketing and Jay Mart Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jay Mart Public and Taokaenoi Food 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 Taokaenoi Food Marketing are associated (or correlated) with Jay Mart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jay Mart Public has no effect on the direction of Taokaenoi Food i.e., Taokaenoi Food and Jay Mart go up and down completely randomly.

Pair Corralation between Taokaenoi Food and Jay Mart

Assuming the 90 days trading horizon Taokaenoi Food Marketing is expected to generate 49.59 times more return on investment than Jay Mart. However, Taokaenoi Food is 49.59 times more volatile than Jay Mart Public. It trades about 0.11 of its potential returns per unit of risk. Jay Mart Public is currently generating about -0.06 per unit of risk. If you would invest  905.00  in Taokaenoi Food Marketing on September 2, 2024 and sell it today you would lose (60.00) from holding Taokaenoi Food Marketing or give up 6.63% of portfolio value over 90 days.

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

Taokaenoi Food Marketing  vs.  Jay Mart Public

Taokaenoi Food Marketing

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Taokaenoi Food Marketing are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Taokaenoi Food disclosed solid returns over the last few months and may actually be approaching a breakup point.

Jay Mart Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jay Mart Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Taokaenoi Food and Jay Mart

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

The idea behind Taokaenoi Food Marketing and Jay Mart Public 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.