Correlation Between HAMMONIA Schiffsholding and JD

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

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

Diversification Opportunities for HAMMONIA Schiffsholding and JD

-0.78

Correlation Coefficient

HAMMONIA Schiffsholding  JD

Pay attention - limited upside

The 3 months correlation between HAMMONIA and JD is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding HAMMONIA Schiffsholding AG 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 HAMMONIA Schiffsholding 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 HAMMONIA Schiffsholding AG 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 HAMMONIA Schiffsholding i.e., HAMMONIA Schiffsholding and JD go up and down completely randomly.

Pair Corralation between HAMMONIA Schiffsholding and JD

Assuming the 90 days trading horizon HAMMONIA Schiffsholding AG is expected to generate 0.65 times more return on investment than JD. However, HAMMONIA Schiffsholding AG is 1.53 times less risky than JD. It trades about 0.11 of its potential returns per unit of risk. JD Inc Adr is currently generating about -0.04 per unit of risk. If you would invest  27,400  in HAMMONIA Schiffsholding AG on September 3, 2024 and sell it today you would earn a total of  1,200  from holding HAMMONIA Schiffsholding AG or generate 4.38% return on investment over 90 days.

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

HAMMONIA Schiffsholding AG  vs.  JD Inc Adr

HAMMONIA Schiffsholding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HAMMONIA Schiffsholding AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, HAMMONIA Schiffsholding is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

JD Inc Adr

Risk-Adjusted Performance

13 of 100

Good

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

Pair Trading with HAMMONIA Schiffsholding and JD

The main advantage of trading using opposite HAMMONIA Schiffsholding and JD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HAMMONIA Schiffsholding 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 HAMMONIA Schiffsholding AG and JD Inc Adr 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.