Correlation Between Jd Com Inc and Dada Nexus

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

Diversification Opportunities for Jd Com Inc and Dada Nexus

0.88
  Correlation Coefficient

Very poor diversification

The 3 months correlation between JDCMF and Dada is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Jd Com Inc and Dada Nexus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dada Nexus and Jd Com Inc 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 Com Inc are associated (or correlated) with Dada Nexus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dada Nexus has no effect on the direction of Jd Com Inc i.e., Jd Com Inc and Dada Nexus go up and down completely randomly.

Pair Corralation between Jd Com Inc and Dada Nexus

Assuming the 90 days horizon Jd Com Inc is expected to generate 1.11 times more return on investment than Dada Nexus. However, Jd Com Inc is 1.11 times more volatile than Dada Nexus. It trades about -0.02 of its potential returns per unit of risk. Dada Nexus is currently generating about -0.28 per unit of risk. If you would invest  1,876  in Jd Com Inc on August 29, 2024 and sell it today you would lose (103.00) from holding Jd Com Inc or give up 5.49% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Jd Com Inc  vs.  Dada Nexus

 Performance 
       Timeline  
Jd Com Inc 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Jd Com Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain primary indicators, Jd Com Inc reported solid returns over the last few months and may actually be approaching a breakup point.
Dada Nexus 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Dada Nexus are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain fundamental indicators, Dada Nexus sustained solid returns over the last few months and may actually be approaching a breakup point.

Jd Com Inc and Dada Nexus Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Jd Com Inc and Dada Nexus

The main advantage of trading using opposite Jd Com Inc and Dada Nexus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jd Com Inc position performs unexpectedly, Dada Nexus 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 Dada Nexus will offset losses from the drop in Dada Nexus' long position.
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The idea behind Jd Com Inc and Dada Nexus 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.
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.

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