Correlation Between NYSE Composite and JD Health
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and JD Health 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 NYSE Composite and JD Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and JD Health International, you can compare the effects of market volatilities on NYSE Composite and JD Health 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 NYSE Composite with a short position of JD Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and JD Health.
Diversification Opportunities for NYSE Composite and JD Health
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and JDHIY is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and JD Health International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JD Health International and NYSE Composite 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 NYSE Composite are associated (or correlated) with JD Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JD Health International has no effect on the direction of NYSE Composite i.e., NYSE Composite and JD Health go up and down completely randomly.
Pair Corralation between NYSE Composite and JD Health
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.34 times more return on investment than JD Health. However, NYSE Composite is 2.91 times less risky than JD Health. It trades about 0.14 of its potential returns per unit of risk. JD Health International is currently generating about 0.03 per unit of risk. If you would invest 1,800,696 in NYSE Composite on August 31, 2024 and sell it today you would earn a total of 226,508 from holding NYSE Composite or generate 12.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
NYSE Composite vs. JD Health International
Performance |
| Timeline |
NYSE Composite and JD Health Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
JD Health International
Pair trading matchups for JD Health
Pair Trading with NYSE Composite and JD Health
The main advantage of trading using opposite NYSE Composite and JD Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, JD Health 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 Health will offset losses from the drop in JD Health's long position.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
| JD Health vs. Pennant Group | JD Health vs. Encompass Health Corp | JD Health vs. Enhabit | JD Health vs. Concord Medical Services |
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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