Correlation Between Jd Com Inc and Oriental Culture

Can any of the company-specific risk be diversified away by investing in both Jd Com Inc and Oriental Culture 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 Com Inc and Oriental Culture into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Jd Com Inc and Oriental Culture Holding, you can compare the effects of market volatilities on Jd Com Inc and Oriental Culture 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 Com Inc with a short position of Oriental Culture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jd Com Inc and Oriental Culture.

Diversification Opportunities for Jd Com Inc and Oriental Culture

0.61

Correlation Coefficient

Jd Com Inc  Oriental Culture

Poor diversification

The 3 months correlation between JDCMF and Oriental is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Jd Com Inc and Oriental Culture Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oriental Culture Holding and Jd Com Inc 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 Com Inc are associated (or correlated) with Oriental Culture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oriental Culture Holding has no effect on the direction of Jd Com Inc i.e., Jd Com Inc and Oriental Culture go up and down completely randomly.

Pair Corralation between Jd Com Inc and Oriental Culture

Assuming the 90 days horizon Jd Com Inc is expected to generate 1.3 times less return on investment than Oriental Culture. But when comparing it to its historical volatility, Jd Com Inc is 1.14 times less risky than Oriental Culture. It trades about 0.07 of its potential returns per unit of risk. Oriental Culture Holding is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  111.00  in Oriental Culture Holding on September 3, 2024 and sell it today you would earn a total of  27.00  from holding Oriental Culture Holding or generate 24.32% return on investment over 90 days.

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

Jd Com Inc  vs.  Oriental Culture Holding

Jd Com Inc

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Jd Com Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal primary indicators, Jd Com Inc reported solid returns over the last few months and may actually be approaching a breakup point.

Oriental Culture Holding

Risk-Adjusted Performance

6 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Oriental Culture Holding are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, Oriental Culture reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jd Com Inc and Oriental Culture

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

The idea behind Jd Com Inc and Oriental Culture Holding 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.