Correlation Between JD and D MARKET
Can any of the company-specific risk be diversified away by investing in both JD and D MARKET 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 D MARKET 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 D MARKET Electronic Services, you can compare the effects of market volatilities on JD and D MARKET 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 D MARKET. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD and D MARKET.
Diversification Opportunities for JD and D MARKET
Average diversification
The 3 months correlation between JD and HEPS is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding JD Inc Adr and D MARKET Electronic Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on D MARKET Electronic 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 D MARKET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of D MARKET Electronic has no effect on the direction of JD i.e., JD and D MARKET go up and down completely randomly.
Pair Corralation between JD and D MARKET
Allowing for the 90-day total investment horizon JD is expected to generate 4.28 times less return on investment than D MARKET. But when comparing it to its historical volatility, JD Inc Adr is 1.91 times less risky than D MARKET. It trades about 0.04 of its potential returns per unit of risk. D MARKET Electronic Services is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 153.00 in D MARKET Electronic Services on September 3, 2024 and sell it today you would earn a total of 144.00 from holding D MARKET Electronic Services or generate 94.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD Inc Adr vs. D MARKET Electronic Services
Performance |
| Timeline |
| JD Inc Adr |
| D MARKET Electronic |
JD and D MARKET Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD and D MARKET
The main advantage of trading using opposite JD and D MARKET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD position performs unexpectedly, D MARKET 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 D MARKET will offset losses from the drop in D MARKET's long position.The idea behind JD Inc Adr and D MARKET Electronic Services 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.| D MARKET vs. MercadoLibre | D MARKET vs. PDD Holdings | D MARKET vs. JD Inc Adr | D MARKET vs. Alibaba Group Holding |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |