Correlation Between G2D Investments and JD
Can any of the company-specific risk be diversified away by investing in both G2D Investments 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 G2D Investments and JD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between G2D Investments and JD Inc, you can compare the effects of market volatilities on G2D Investments 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 G2D Investments with a short position of JD. Check out your portfolio center. Please also check ongoing floating volatility patterns of G2D Investments and JD.
Diversification Opportunities for G2D Investments and JD
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between G2D and JD is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding G2D Investments and JD Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JD Inc and G2D Investments 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 G2D Investments 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 G2D Investments i.e., G2D Investments and JD go up and down completely randomly.
Pair Corralation between G2D Investments and JD
Assuming the 90 days trading horizon G2D Investments is expected to under-perform the JD. But the stock apears to be less risky and, when comparing its historical volatility, G2D Investments is 1.92 times less risky than JD. The stock trades about -0.13 of its potential returns per unit of risk. The JD Inc is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 3,844 in JD Inc on August 31, 2024 and sell it today you would lose (19.00) from holding JD Inc or give up 0.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
G2D Investments vs. JD Inc
Performance |
| Timeline |
| G2D Investments |
| JD Inc |
G2D Investments and JD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G2D Investments and JD
The main advantage of trading using opposite G2D Investments and JD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G2D Investments 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.| G2D Investments vs. The Bank of | G2D Investments vs. Ameriprise Financial | G2D Investments vs. Banco BTG Pactual | G2D Investments vs. Banco BTG Pactual |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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