Correlation Between Raiffeisen Bank and JD

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

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

Diversification Opportunities for Raiffeisen Bank and JD

0.15

Correlation Coefficient

Raiffeisen Bank  JD

Average diversification

The 3 months correlation between Raiffeisen and JD is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Raiffeisen Bank International and JD Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JD Inc and Raiffeisen Bank 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 Raiffeisen Bank International 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 Raiffeisen Bank i.e., Raiffeisen Bank and JD go up and down completely randomly.

Pair Corralation between Raiffeisen Bank and JD

Assuming the 90 days trading horizon Raiffeisen Bank International is expected to generate 0.47 times more return on investment than JD. However, Raiffeisen Bank International is 2.11 times less risky than JD. It trades about 0.32 of its potential returns per unit of risk. JD Inc is currently generating about 0.13 per unit of risk. If you would invest  1,823  in Raiffeisen Bank International on September 15, 2024 and sell it today you would earn a total of  203.00  from holding Raiffeisen Bank International or generate 11.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.65%
Values	Daily Returns

Raiffeisen Bank International  vs.  JD Inc

Raiffeisen Bank Inte

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Raiffeisen Bank International are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Raiffeisen Bank demonstrated solid returns over the last few months and may actually be approaching a breakup point.

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 Raiffeisen Bank and JD

The main advantage of trading using opposite Raiffeisen Bank and JD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Raiffeisen Bank 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 Raiffeisen Bank International 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.