Correlation Between Qurate Retail and JD
Can any of the company-specific risk be diversified away by investing in both Qurate Retail 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 Qurate Retail and JD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qurate Retail Series and JD Inc Adr, you can compare the effects of market volatilities on Qurate Retail 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 Qurate Retail with a short position of JD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qurate Retail and JD.
Diversification Opportunities for Qurate Retail and JD
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Qurate and JD is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Qurate Retail Series 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 Qurate Retail 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 Qurate Retail Series 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 Qurate Retail i.e., Qurate Retail and JD go up and down completely randomly.
Pair Corralation between Qurate Retail and JD
Assuming the 90 days horizon Qurate Retail Series is expected to generate 1.6 times more return on investment than JD. However, Qurate Retail is 1.6 times more volatile than JD Inc Adr. It trades about -0.06 of its potential returns per unit of risk. JD Inc Adr is currently generating about -0.24 per unit of risk. If you would invest 348.00 in Qurate Retail Series on August 27, 2024 and sell it today you would lose (33.00) from holding Qurate Retail Series or give up 9.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qurate Retail Series vs. JD Inc Adr
Performance |
| Timeline |
| Qurate Retail Series |
| JD Inc Adr |
Qurate Retail and JD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qurate Retail and JD
The main advantage of trading using opposite Qurate Retail and JD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qurate Retail 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.| Qurate Retail vs. Sea | Qurate Retail vs. Wayfair | Qurate Retail vs. Chewy Inc | Qurate Retail vs. Vipshop Holdings Limited |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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