Correlation Between JD and T Mobile
Can any of the company-specific risk be diversified away by investing in both JD and T Mobile 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 T Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JD Inc and T Mobile, you can compare the effects of market volatilities on JD and T Mobile 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 T Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD and T Mobile.
Diversification Opportunities for JD and T Mobile
Very weak diversification
The 3 months correlation between JD and T1MU34 is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding JD Inc and T Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Mobile 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 are associated (or correlated) with T Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T Mobile has no effect on the direction of JD i.e., JD and T Mobile go up and down completely randomly.
Pair Corralation between JD and T Mobile
Assuming the 90 days trading horizon JD is expected to generate 1.07 times less return on investment than T Mobile. In addition to that, JD is 2.64 times more volatile than T Mobile. It trades about 0.1 of its total potential returns per unit of risk. T Mobile is currently generating about 0.28 per unit of volatility. If you would invest 47,325 in T Mobile on September 3, 2024 and sell it today you would earn a total of 26,551 from holding T Mobile or generate 56.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
JD Inc vs. T Mobile
Performance |
| Timeline |
| JD Inc |
| T Mobile |
JD and T Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD and T Mobile
The main advantage of trading using opposite JD and T Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD position performs unexpectedly, T Mobile 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 T Mobile will offset losses from the drop in T Mobile's long position.| JD vs. Unity Software | JD vs. Verizon Communications | JD vs. Take Two Interactive Software | JD vs. Cognizant Technology Solutions |
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.
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