Correlation Between JD and LandBridge Company

Can any of the company-specific risk be diversified away by investing in both JD and LandBridge Company 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 LandBridge Company 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 LandBridge Company LLC, you can compare the effects of market volatilities on JD and LandBridge Company 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 LandBridge Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD and LandBridge Company.

Diversification Opportunities for JD and LandBridge Company

-0.45

Correlation Coefficient

JD  LandBridge Company

Very good diversification

The 3 months correlation between JD and LandBridge is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding JD Inc Adr and LandBridge Company LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LandBridge Company 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 LandBridge Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LandBridge Company has no effect on the direction of JD i.e., JD and LandBridge Company go up and down completely randomly.

Pair Corralation between JD and LandBridge Company

Allowing for the 90-day total investment horizon JD Inc Adr is expected to generate 0.88 times more return on investment than LandBridge Company. However, JD Inc Adr is 1.14 times less risky than LandBridge Company. It trades about 0.09 of its potential returns per unit of risk. LandBridge Company LLC is currently generating about -0.21 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 Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

JD Inc Adr  vs.  LandBridge Company LLC

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.

LandBridge Company

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in LandBridge Company LLC are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating fundamental drivers, LandBridge Company sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JD and LandBridge Company

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

The idea behind JD Inc Adr and LandBridge Company LLC 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.