Correlation Between Baozun Inc and Jd Inc

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Baozun Inc and Jd Inc 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 Baozun Inc and Jd Inc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baozun Inc ADR and Jd Inc ADR, you can compare the effects of market volatilities on Baozun Inc and Jd Inc 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 Baozun Inc with a short position of Jd Inc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baozun Inc and Jd Inc.

Diversification Opportunities for Baozun Inc and Jd Inc

0.88
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Baozun and Jd Inc is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Baozun Inc ADR 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 Baozun 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 Baozun Inc ADR are associated (or correlated) with Jd Inc. 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 Baozun Inc i.e., Baozun Inc and Jd Inc go up and down completely randomly.

Pair Corralation between Baozun Inc and Jd Inc

Given the investment horizon of 90 days Baozun Inc ADR is expected to under-perform the Jd Inc. In addition to that, Baozun Inc is 1.44 times more volatile than Jd Inc ADR. It trades about -0.09 of its total potential returns per unit of risk. Jd Inc ADR is currently generating about -0.11 per unit of volatility. If you would invest  6,205  in Jd Inc ADR on May 17, 2022 and sell it today you would lose (407.00)  from holding Jd Inc ADR or give up 6.56% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Baozun Inc ADR  vs.  Jd Inc ADR

 Performance (%) 
       Timeline  
Baozun Inc ADR 
Baozun Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Baozun Inc ADR are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Baozun Inc disclosed solid returns over the last few months and may actually be approaching a breakup point.

Baozun Price Channel

Jd Inc ADR 
Jd Inc Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Jd Inc ADR are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, Jd Inc exhibited solid returns over the last few months and may actually be approaching a breakup point.

Jd Inc Price Channel

Baozun Inc and Jd Inc Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Baozun Inc and Jd Inc

The main advantage of trading using opposite Baozun Inc and Jd Inc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baozun Inc position performs unexpectedly, Jd Inc 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 Inc will offset losses from the drop in Jd Inc's long position.
The idea behind Baozun Inc ADR 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.
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.

Other Complementary Tools

Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Go
Focused Opportunities
Build portfolios using our predefined set of ideas and optimize them against your investing preferences
Go
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Go
ETF Directory
Find actively traded Exchange Traded Funds (ETF) from around the world
Go
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Go
Shere Portfolio
Track or share privately all of your investments from the convenience of any device
Go
Fundamental Analysis
View fundamental data based on most recent published financial statements
Go
Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets
Go
Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Go
Positions Ratings
Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Go
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Go
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Go