Correlation Between JD and Lotus Technology
Can any of the company-specific risk be diversified away by investing in both JD and Lotus Technology 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 Lotus Technology 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 Lotus Technology American, you can compare the effects of market volatilities on JD and Lotus Technology 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 Lotus Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD and Lotus Technology.
Diversification Opportunities for JD and Lotus Technology
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between JD and Lotus is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding JD Inc Adr and Lotus Technology American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotus Technology American 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 Lotus Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotus Technology American has no effect on the direction of JD i.e., JD and Lotus Technology go up and down completely randomly.
Pair Corralation between JD and Lotus Technology
Allowing for the 90-day total investment horizon JD Inc Adr is expected to generate 0.78 times more return on investment than Lotus Technology. However, JD Inc Adr is 1.29 times less risky than Lotus Technology. It trades about -0.02 of its potential returns per unit of risk. Lotus Technology American is currently generating about -0.02 per unit of risk. If you would invest 5,787 in JD Inc Adr on August 27, 2024 and sell it today you would lose (2,319) from holding JD Inc Adr or give up 40.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD Inc Adr vs. Lotus Technology American
Performance |
| Timeline |
| JD Inc Adr |
| Lotus Technology American |
JD and Lotus Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD and Lotus Technology
The main advantage of trading using opposite JD and Lotus Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD position performs unexpectedly, Lotus Technology 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 Lotus Technology will offset losses from the drop in Lotus Technology's long position.The idea behind JD Inc Adr and Lotus Technology American 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.| Lotus Technology vs. Grocery Outlet Holding | Lotus Technology vs. Titan Machinery | Lotus Technology vs. Getty Realty | Lotus Technology vs. Upper Street Marketing |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |