Correlation Between Getty Images and JD

Can any of the company-specific risk be diversified away by investing in both Getty Images 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 Getty Images and JD into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Getty Images Holdings and JD Inc Adr, you can compare the effects of market volatilities on Getty Images 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 Getty Images with a short position of JD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Getty Images and JD.

Diversification Opportunities for Getty Images and JD

0.6

Correlation Coefficient

Getty Images  JD

Poor diversification

The 3 months correlation between Getty and JD is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Getty Images Holdings 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 Getty Images 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 Getty Images Holdings 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 Getty Images i.e., Getty Images and JD go up and down completely randomly.

Pair Corralation between Getty Images and JD

Given the investment horizon of 90 days Getty Images Holdings is expected to under-perform the JD. In addition to that, Getty Images is 1.08 times more volatile than JD Inc Adr. It trades about -0.21 of its total potential returns per unit of risk. JD Inc Adr is currently generating about -0.04 per unit of volatility. If you would invest  4,000  in JD Inc Adr on September 30, 2024 and sell it today you would lose (502.00) from holding JD Inc Adr or give up 12.55% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Getty Images Holdings  vs.  JD Inc Adr

Getty Images Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Getty Images Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

JD Inc Adr

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JD Inc Adr has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Getty Images and JD

The main advantage of trading using opposite Getty Images and JD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Getty Images 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.

The idea behind Getty Images Holdings and JD Inc Adr 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.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.