Correlation Between Oriental Culture and Jd

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

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

Diversification Opportunities for Oriental Culture and Jd

0.64

Correlation Coefficient

Oriental Culture  Jd

Poor diversification

The 3 months correlation between Oriental and Jd is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Oriental Culture Holding and Jd Com Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jd Com Inc and Oriental Culture 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 Oriental Culture Holding 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 Com Inc has no effect on the direction of Oriental Culture i.e., Oriental Culture and Jd go up and down completely randomly.

Pair Corralation between Oriental Culture and Jd

Considering the 90-day investment horizon Oriental Culture Holding is expected to under-perform the Jd. In addition to that, Oriental Culture is 1.32 times more volatile than Jd Com Inc. It trades about -0.06 of its total potential returns per unit of risk. Jd Com Inc is currently generating about -0.05 per unit of volatility. If you would invest  1,876  in Jd Com Inc on September 1, 2024 and sell it today you would lose (159.00) from holding Jd Com Inc or give up 8.48% of portfolio value over 90 days.

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

Oriental Culture Holding  vs.  Jd Com Inc

Oriental Culture Holding

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Oriental Culture Holding are ranked lower than 3 (%) 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.

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 unsteady primary indicators, Jd reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Oriental Culture and Jd

The main advantage of trading using opposite Oriental Culture and Jd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oriental Culture 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 Oriental Culture Holding and Jd Com 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.

Check out your portfolio center.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.