Correlation Between JD and Miniso Group
Can any of the company-specific risk be diversified away by investing in both JD and Miniso Group 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 Miniso Group 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 Miniso Group Holding, you can compare the effects of market volatilities on JD and Miniso Group 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 Miniso Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD and Miniso Group.
Diversification Opportunities for JD and Miniso Group
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JD and Miniso is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding JD Inc Adr and Miniso Group Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Miniso Group Holding 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 Miniso Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Miniso Group Holding has no effect on the direction of JD i.e., JD and Miniso Group go up and down completely randomly.
Pair Corralation between JD and Miniso Group
Allowing for the 90-day total investment horizon JD Inc Adr is expected to under-perform the Miniso Group. But the stock apears to be less risky and, when comparing its historical volatility, JD Inc Adr is 1.04 times less risky than Miniso Group. The stock trades about -0.11 of its potential returns per unit of risk. The Miniso Group Holding is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 1,928 in Miniso Group Holding on August 30, 2024 and sell it today you would lose (79.00) from holding Miniso Group Holding or give up 4.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD Inc Adr vs. Miniso Group Holding
Performance |
| Timeline |
| JD Inc Adr |
| Miniso Group Holding |
JD and Miniso Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD and Miniso Group
The main advantage of trading using opposite JD and Miniso Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD position performs unexpectedly, Miniso Group 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 Miniso Group will offset losses from the drop in Miniso Group's long position.The idea behind JD Inc Adr and Miniso Group Holding 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.| Miniso Group vs. Leslies | Miniso Group vs. Sally Beauty Holdings | Miniso Group vs. ODP Corp | Miniso Group vs. 1 800 FLOWERSCOM |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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