Correlation Between OMV Aktiengesellscha and JD

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

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

Diversification Opportunities for OMV Aktiengesellscha and JD

0.75

Correlation Coefficient

OMV Aktiengesellscha  JD

Poor diversification

The 3 months correlation between OMV and JD is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding OMV Aktiengesellschaft and JD Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JD Inc and OMV Aktiengesellscha 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 OMV Aktiengesellschaft 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 has no effect on the direction of OMV Aktiengesellscha i.e., OMV Aktiengesellscha and JD go up and down completely randomly.

Pair Corralation between OMV Aktiengesellscha and JD

Assuming the 90 days trading horizon OMV Aktiengesellscha is expected to generate 15.68 times less return on investment than JD. But when comparing it to its historical volatility, OMV Aktiengesellschaft is 3.35 times less risky than JD. It trades about 0.04 of its potential returns per unit of risk. JD Inc is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  2,365  in JD Inc on September 16, 2024 and sell it today you would earn a total of  1,175  from holding JD Inc or generate 49.68% return on investment over 90 days.

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

OMV Aktiengesellschaft  vs.  JD Inc

OMV Aktiengesellschaft

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in OMV Aktiengesellschaft are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, OMV Aktiengesellscha is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

JD Inc

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in JD Inc are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, JD demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with OMV Aktiengesellscha and JD

The main advantage of trading using opposite OMV Aktiengesellscha and JD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OMV Aktiengesellscha 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 OMV Aktiengesellschaft and JD Inc 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..