Correlation Between JD and Camping World

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Can any of the company-specific risk be diversified away by investing in both JD and Camping World 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 JD and Camping World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JD Inc Adr and Camping World Holdings, you can compare the effects of market volatilities on JD and Camping World 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 JD with a short position of Camping World. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD and Camping World.

Diversification Opportunities for JD and Camping World

-0.31
  Correlation Coefficient

Very good diversification

The 3 months correlation between JD and Camping is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding JD Inc Adr and Camping World Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camping World Holdings and JD 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 JD Inc Adr are associated (or correlated) with Camping World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camping World Holdings has no effect on the direction of JD i.e., JD and Camping World go up and down completely randomly.

Pair Corralation between JD and Camping World

Allowing for the 90-day total investment horizon JD Inc Adr is expected to generate 1.48 times more return on investment than Camping World. However, JD is 1.48 times more volatile than Camping World Holdings. It trades about 0.09 of its potential returns per unit of risk. Camping World Holdings is currently generating about -0.08 per unit of risk. If you would invest  3,533  in JD Inc Adr on September 18, 2024 and sell it today you would earn a total of  194.00  from holding JD Inc Adr or generate 5.49% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

JD Inc Adr  vs.  Camping World Holdings

 Performance 
       Timeline  
JD Inc Adr 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in JD Inc Adr are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, JD exhibited solid returns over the last few months and may actually be approaching a breakup point.
Camping World Holdings 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Camping World Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

JD and Camping World Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with JD and Camping World

The main advantage of trading using opposite JD and Camping World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD position performs unexpectedly, Camping World 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 Camping World will offset losses from the drop in Camping World's long position.
The idea behind JD Inc Adr and Camping World Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.

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