Correlation Between Multilaser Industrial and JD

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

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

Diversification Opportunities for Multilaser Industrial and JD

0.38

Correlation Coefficient

Multilaser Industrial  JD

Weak diversification

The 3 months correlation between Multilaser and JD is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Multilaser Industrial SA and JD Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JD Inc and Multilaser Industrial 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 Multilaser Industrial SA 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 Multilaser Industrial i.e., Multilaser Industrial and JD go up and down completely randomly.

Pair Corralation between Multilaser Industrial and JD

Assuming the 90 days trading horizon Multilaser Industrial SA is expected to generate 0.94 times more return on investment than JD. However, Multilaser Industrial SA is 1.06 times less risky than JD. It trades about 0.08 of its potential returns per unit of risk. JD Inc is currently generating about 0.05 per unit of risk. If you would invest  105.00  in Multilaser Industrial SA on December 24, 2024 and sell it today you would earn a total of  13.00  from holding Multilaser Industrial SA or generate 12.38% return on investment over 90 days.

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

Multilaser Industrial SA  vs.  JD Inc

Multilaser Industrial

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Multilaser Industrial SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Multilaser Industrial unveiled solid returns over the last few months and may actually be approaching a breakup point.

JD Inc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in JD Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, JD may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Multilaser Industrial and JD

The main advantage of trading using opposite Multilaser Industrial and JD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multilaser Industrial 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 Multilaser Industrial SA 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..