Correlation Between Alibaba Group and Jd
Can any of the company-specific risk be diversified away by investing in both Alibaba Group and Jd 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 Alibaba Group and Jd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alibaba Group Holding and Jd Com Inc, you can compare the effects of market volatilities on Alibaba Group and Jd 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 Alibaba Group with a short position of Jd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alibaba Group and Jd.
Diversification Opportunities for Alibaba Group and Jd
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Alibaba and Jd is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Alibaba Group Holding and Jd Com Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jd Com Inc and Alibaba Group 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 Alibaba Group Holding are associated (or correlated) with Jd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jd Com Inc has no effect on the direction of Alibaba Group i.e., Alibaba Group and Jd go up and down completely randomly.
Pair Corralation between Alibaba Group and Jd
Assuming the 90 days horizon Alibaba Group Holding is expected to generate 0.83 times more return on investment than Jd. However, Alibaba Group Holding is 1.2 times less risky than Jd. It trades about 0.02 of its potential returns per unit of risk. Jd Com Inc is currently generating about 0.01 per unit of risk. If you would invest 1,230 in Alibaba Group Holding on November 2, 2024 and sell it today you would lose (7.00) from holding Alibaba Group Holding or give up 0.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Alibaba Group Holding vs. Jd Com Inc
Performance |
| Timeline |
| Alibaba Group Holding |
| Jd Com Inc |
Alibaba Group and Jd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alibaba Group and Jd
The main advantage of trading using opposite Alibaba Group and Jd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alibaba Group position performs unexpectedly, Jd 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 will offset losses from the drop in Jd's long position.| Alibaba Group vs. Meituan ADR | Alibaba Group vs. Meituan | Alibaba Group vs. Qurate Retail Series | Alibaba Group vs. ThredUp |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |