Correlation Between Emerge Commerce and JD
Can any of the company-specific risk be diversified away by investing in both Emerge Commerce 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 Emerge Commerce and JD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerge Commerce and JD Inc Adr, you can compare the effects of market volatilities on Emerge Commerce 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 Emerge Commerce with a short position of JD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerge Commerce and JD.
Diversification Opportunities for Emerge Commerce and JD
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Emerge and JD is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Emerge Commerce 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 Emerge Commerce 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 Emerge Commerce 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 Emerge Commerce i.e., Emerge Commerce and JD go up and down completely randomly.
Pair Corralation between Emerge Commerce and JD
Assuming the 90 days horizon Emerge Commerce is expected to generate 14.42 times more return on investment than JD. However, Emerge Commerce is 14.42 times more volatile than JD Inc Adr. It trades about 0.04 of its potential returns per unit of risk. JD Inc Adr is currently generating about -0.01 per unit of risk. If you would invest 13.00 in Emerge Commerce on August 28, 2024 and sell it today you would lose (10.49) from holding Emerge Commerce or give up 80.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emerge Commerce vs. JD Inc Adr
Performance |
| Timeline |
| Emerge Commerce |
| JD Inc Adr |
Emerge Commerce and JD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerge Commerce and JD
The main advantage of trading using opposite Emerge Commerce and JD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerge Commerce 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.| Emerge Commerce vs. 1StdibsCom | Emerge Commerce vs. Natural Health Trend | Emerge Commerce vs. Hour Loop | Emerge Commerce vs. Liquidity Services |
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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