Correlation Between J Long and JD
Can any of the company-specific risk be diversified away by investing in both J Long 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 J Long and JD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between J Long Group Limited and JD Inc Adr, you can compare the effects of market volatilities on J Long 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 J Long with a short position of JD. Check out your portfolio center. Please also check ongoing floating volatility patterns of J Long and JD.
Diversification Opportunities for J Long and JD
Weak diversification
The 3 months correlation between J Long and JD is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding J Long Group Limited 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 J Long 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 J Long Group Limited 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 J Long i.e., J Long and JD go up and down completely randomly.
Pair Corralation between J Long and JD
Allowing for the 90-day total investment horizon J Long Group Limited is expected to generate 1.88 times more return on investment than JD. However, J Long is 1.88 times more volatile than JD Inc Adr. It trades about 0.16 of its potential returns per unit of risk. JD Inc Adr is currently generating about 0.09 per unit of risk. If you would invest 290.00 in J Long Group Limited on September 26, 2024 and sell it today you would earn a total of 55.00 from holding J Long Group Limited or generate 18.97% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
J Long Group Limited vs. JD Inc Adr
Performance |
Timeline |
J Long Group |
JD Inc Adr |
J Long and JD Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with J Long and JD
The main advantage of trading using opposite J Long and JD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J Long 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.J Long vs. ServiceNow | J Long vs. NETGEAR | J Long vs. Bassett Furniture Industries | J Long vs. SL Green Realty |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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