Correlation Between PDD Holdings and Jd Com Inc
Can any of the company-specific risk be diversified away by investing in both PDD Holdings and Jd Com Inc 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 PDD Holdings and Jd Com Inc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PDD Holdings and Jd Com Inc, you can compare the effects of market volatilities on PDD Holdings and Jd Com Inc 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 PDD Holdings with a short position of Jd Com Inc. Check out your portfolio center. Please also check ongoing floating volatility patterns of PDD Holdings and Jd Com Inc.
Diversification Opportunities for PDD Holdings and Jd Com Inc
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between PDD and JDCMF is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding PDD Holdings and Jd Com Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jd Com Inc and PDD Holdings 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 PDD Holdings are associated (or correlated) with Jd Com Inc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jd Com Inc has no effect on the direction of PDD Holdings i.e., PDD Holdings and Jd Com Inc go up and down completely randomly.
Pair Corralation between PDD Holdings and Jd Com Inc
Considering the 90-day investment horizon PDD Holdings is expected to under-perform the Jd Com Inc. But the stock apears to be less risky and, when comparing its historical volatility, PDD Holdings is 1.66 times less risky than Jd Com Inc. The stock trades about -0.33 of its potential returns per unit of risk. The Jd Com Inc is currently generating about -0.02 of returns per unit of risk over similar time horizon. 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 Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PDD Holdings vs. Jd Com Inc
Performance |
| Timeline |
| PDD Holdings |
| Jd Com Inc |
PDD Holdings and Jd Com Inc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PDD Holdings and Jd Com Inc
The main advantage of trading using opposite PDD Holdings and Jd Com Inc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PDD Holdings position performs unexpectedly, Jd Com Inc 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 Com Inc will offset losses from the drop in Jd Com Inc's long position.| PDD Holdings vs. Alibaba Group Holding | PDD Holdings vs. Sea | PDD Holdings vs. MercadoLibre | PDD Holdings vs. Vipshop Holdings Limited |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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