Correlation Between Jd Inc and Amazon

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

Diversification Opportunities for Jd Inc and Amazon

-0.06
  Correlation Coefficient

Good diversification

The 3 months correlation between Jd Inc and Amazon is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Jd Inc ADR and Amazon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc and Jd 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 Inc ADR are associated (or correlated) with Amazon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amazon Inc has no effect on the direction of Jd Inc i.e., Jd Inc and Amazon go up and down completely randomly.

Pair Corralation between Jd Inc and Amazon

Allowing for the 90-day total investment horizon Jd Inc ADR is expected to generate 1.66 times more return on investment than Amazon. However, Jd Inc is 1.66 times more volatile than Amazon Inc. It trades about 0.02 of its potential returns per unit of risk. Amazon Inc is currently generating about -0.02 per unit of risk. If you would invest  6,077  in Jd Inc ADR on April 3, 2022 and sell it today you would earn a total of  518.00  from holding Jd Inc ADR or generate 8.52% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Jd Inc ADR  vs.  Amazon Inc

 Performance (%) 
      Timeline 
Jd Inc ADR 
Jd Inc Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Jd Inc ADR are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sluggish fundamental indicators, Jd Inc may actually be approaching a critical reversion point that can send shares even higher in August 2022.

Structure and Payout Changes

Payout Ratio
0.22
Dividend Date
2022-06-14
Ex Dividend Date
2022-05-19

Jd Inc Price Channel

Amazon Inc 
Amazon Performance
0 of 100
Over the last 90 days Amazon Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite sluggish performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in August 2022. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Structure and Payout Changes

Last Split Factor
20:1
Last Split Date
2022-06-06

Amazon Price Channel

Jd Inc and Amazon Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Jd Inc and Amazon

The main advantage of trading using opposite Jd Inc and Amazon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jd Inc position performs unexpectedly, Amazon 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 Amazon will offset losses from the drop in Amazon's long position.
The idea behind Jd Inc ADR and Amazon 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.

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