Correlation Between Jeffs Brands and Dada Nexus
Can any of the company-specific risk be diversified away by investing in both Jeffs Brands 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 Jeffs Brands and Dada Nexus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jeffs Brands and Dada Nexus, you can compare the effects of market volatilities on Jeffs Brands 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 Jeffs Brands with a short position of Dada Nexus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeffs Brands and Dada Nexus.
Diversification Opportunities for Jeffs Brands and Dada Nexus
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Jeffs and Dada is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Jeffs Brands and Dada Nexus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dada Nexus and Jeffs Brands 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 Jeffs Brands 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 Jeffs Brands i.e., Jeffs Brands and Dada Nexus go up and down completely randomly.
Pair Corralation between Jeffs Brands and Dada Nexus
Given the investment horizon of 90 days Jeffs Brands is expected to generate 44.32 times more return on investment than Dada Nexus. However, Jeffs Brands is 44.32 times more volatile than Dada Nexus. It trades about 0.21 of its potential returns per unit of risk. Dada Nexus is currently generating about -0.28 per unit of risk. If you would invest 30.00 in Jeffs Brands on August 29, 2024 and sell it today you would earn a total of 268.00 from holding Jeffs Brands or generate 893.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeffs Brands vs. Dada Nexus
Performance |
| Timeline |
| Jeffs Brands |
| Dada Nexus |
Jeffs Brands and Dada Nexus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeffs Brands and Dada Nexus
The main advantage of trading using opposite Jeffs Brands and Dada Nexus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeffs Brands 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.The idea behind Jeffs Brands 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.| Dada Nexus vs. Vipshop Holdings Limited | Dada Nexus vs. JD Inc Adr | Dada Nexus vs. PDD Holdings | Dada Nexus vs. Jumia Technologies AG |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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