Correlation Between 1StdibsCom and JD
Can any of the company-specific risk be diversified away by investing in both 1StdibsCom 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 1StdibsCom and JD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 1StdibsCom and JD Inc Adr, you can compare the effects of market volatilities on 1StdibsCom 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 1StdibsCom with a short position of JD. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1StdibsCom and JD.
Diversification Opportunities for 1StdibsCom and JD
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 1StdibsCom and JD is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding 1StdibsCom and JD Inc Adr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JD Inc Adr and 1StdibsCom 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 1StdibsCom 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 Inc Adr has no effect on the direction of 1StdibsCom i.e., 1StdibsCom and JD go up and down completely randomly.
Pair Corralation between 1StdibsCom and JD
Given the investment horizon of 90 days 1StdibsCom is expected to generate 0.73 times more return on investment than JD. However, 1StdibsCom is 1.37 times less risky than JD. It trades about -0.15 of its potential returns per unit of risk. JD Inc Adr is currently generating about -0.2 per unit of risk. If you would invest 424.00 in 1StdibsCom on August 29, 2024 and sell it today you would lose (37.00) from holding 1StdibsCom or give up 8.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
1StdibsCom vs. JD Inc Adr
Performance |
| Timeline |
| 1StdibsCom |
| JD Inc Adr |
1StdibsCom and JD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 1StdibsCom and JD
The main advantage of trading using opposite 1StdibsCom and JD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1StdibsCom 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.| 1StdibsCom vs. Hour Loop | 1StdibsCom vs. Liquidity Services | 1StdibsCom vs. Qurate Retail Series | 1StdibsCom vs. Emerge Commerce |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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