Correlation Between Etsy and JD
Can any of the company-specific risk be diversified away by investing in both Etsy 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 Etsy and JD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Etsy Inc and JD Inc, you can compare the effects of market volatilities on Etsy 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 Etsy with a short position of JD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Etsy and JD.
Diversification Opportunities for Etsy and JD
Pay attention - limited upside
The 3 months correlation between Etsy and JD is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Etsy Inc and JD Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JD Inc and Etsy 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 Etsy Inc 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 has no effect on the direction of Etsy i.e., Etsy and JD go up and down completely randomly.
Pair Corralation between Etsy and JD
Assuming the 90 days trading horizon Etsy Inc is expected to generate 0.65 times more return on investment than JD. However, Etsy Inc is 1.53 times less risky than JD. It trades about 0.15 of its potential returns per unit of risk. JD Inc is currently generating about -0.15 per unit of risk. If you would invest 1,889 in Etsy Inc on August 26, 2024 and sell it today you would earn a total of 127.00 from holding Etsy Inc or generate 6.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Etsy Inc vs. JD Inc
Performance |
| Timeline |
| Etsy Inc |
| JD Inc |
Etsy and JD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Etsy and JD
The main advantage of trading using opposite Etsy and JD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Etsy 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.| Etsy vs. Fidelity National Information | Etsy vs. Automatic Data Processing | Etsy vs. Bio Techne | Etsy vs. Dell Technologies |
| JD vs. Charter Communications | JD vs. T Mobile | JD vs. Iron Mountain Incorporated | JD vs. TAL Education 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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