Correlation Between JD and Golden Entertainment
Can any of the company-specific risk be diversified away by investing in both JD and Golden Entertainment 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 Golden Entertainment 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 Golden Entertainment, you can compare the effects of market volatilities on JD and Golden Entertainment 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 Golden Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD and Golden Entertainment.
Diversification Opportunities for JD and Golden Entertainment
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JD and Golden is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding JD Inc Adr and Golden Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Entertainment 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 Golden Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Entertainment has no effect on the direction of JD i.e., JD and Golden Entertainment go up and down completely randomly.
Pair Corralation between JD and Golden Entertainment
Allowing for the 90-day total investment horizon JD is expected to generate 1.02 times less return on investment than Golden Entertainment. In addition to that, JD is 2.44 times more volatile than Golden Entertainment. It trades about 0.11 of its total potential returns per unit of risk. Golden Entertainment is currently generating about 0.28 per unit of volatility. If you would invest 3,111 in Golden Entertainment on October 23, 2024 and sell it today you would earn a total of 216.00 from holding Golden Entertainment or generate 6.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD Inc Adr vs. Golden Entertainment
Performance |
| Timeline |
| JD Inc Adr |
| Golden Entertainment |
JD and Golden Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD and Golden Entertainment
The main advantage of trading using opposite JD and Golden Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD position performs unexpectedly, Golden Entertainment 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 Golden Entertainment will offset losses from the drop in Golden Entertainment's long position.The idea behind JD Inc Adr and Golden Entertainment 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.| Golden Entertainment vs. Red Rock Resorts | Golden Entertainment vs. Century Casinos | Golden Entertainment vs. Studio City International | Golden Entertainment vs. Ballys Corp |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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