Correlation Between JD and Boqii Holding

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

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

Diversification Opportunities for JD and Boqii Holding

0.32

Correlation Coefficient

JD  Boqii Holding

Weak diversification

The 3 months correlation between JD and Boqii is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding JD Inc Adr and Boqii Holding Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boqii Holding Limited and JD 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 JD Inc Adr are associated (or correlated) with Boqii Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boqii Holding Limited has no effect on the direction of JD i.e., JD and Boqii Holding go up and down completely randomly.

Pair Corralation between JD and Boqii Holding

Allowing for the 90-day total investment horizon JD Inc Adr is expected to generate 0.84 times more return on investment than Boqii Holding. However, JD Inc Adr is 1.2 times less risky than Boqii Holding. It trades about 0.09 of its potential returns per unit of risk. Boqii Holding Limited is currently generating about -0.46 per unit of risk. If you would invest  3,451  in JD Inc Adr on September 26, 2024 and sell it today you would earn a total of  195.00  from holding JD Inc Adr or generate 5.65% return on investment over 90 days.

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

JD Inc Adr  vs.  Boqii Holding Limited

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 rather sound fundamental indicators, JD is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Boqii Holding Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Boqii Holding Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unsteady performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with JD and Boqii Holding

The main advantage of trading using opposite JD and Boqii Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD position performs unexpectedly, Boqii Holding 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 Boqii Holding will offset losses from the drop in Boqii Holding's long position.

The idea behind JD Inc Adr and Boqii Holding Limited 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.