Correlation Between Natural Health and JD
Can any of the company-specific risk be diversified away by investing in both Natural Health and JD 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 Natural Health and JD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natural Health Trend and JD Inc Adr, you can compare the effects of market volatilities on Natural Health and JD 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 Natural Health with a short position of JD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natural Health and JD.
Diversification Opportunities for Natural Health and JD
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Natural and JD is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Natural Health Trend and JD Inc Adr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JD Inc Adr and Natural Health 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 Natural Health Trend are associated (or correlated) with JD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JD Inc Adr has no effect on the direction of Natural Health i.e., Natural Health and JD go up and down completely randomly.
Pair Corralation between Natural Health and JD
Given the investment horizon of 90 days Natural Health Trend is expected to generate 0.78 times more return on investment than JD. However, Natural Health Trend is 1.28 times less risky than JD. It trades about 0.06 of its potential returns per unit of risk. JD Inc Adr is currently generating about -0.02 per unit of risk. If you would invest 302.00 in Natural Health Trend on August 27, 2024 and sell it today you would earn a total of 261.00 from holding Natural Health Trend or generate 86.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Natural Health Trend vs. JD Inc Adr
Performance |
| Timeline |
| Natural Health Trend |
| JD Inc Adr |
Natural Health and JD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natural Health and JD
The main advantage of trading using opposite Natural Health and JD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natural Health position performs unexpectedly, JD 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 JD will offset losses from the drop in JD's long position.| Natural Health vs. Inter Parfums | Natural Health vs. European Wax Center | Natural Health vs. Yatsen Holding | Natural Health vs. Edgewell Personal Care |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |