Correlation Between JD and OPC Energy
Can any of the company-specific risk be diversified away by investing in both JD and OPC Energy 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 and OPC Energy 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 OPC Energy, you can compare the effects of market volatilities on JD and OPC Energy 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 with a short position of OPC Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD and OPC Energy.
Diversification Opportunities for JD and OPC Energy
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between JD and OPC is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding JD Inc Adr and OPC Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OPC Energy and JD 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 OPC Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OPC Energy has no effect on the direction of JD i.e., JD and OPC Energy go up and down completely randomly.
Pair Corralation between JD and OPC Energy
Allowing for the 90-day total investment horizon JD Inc Adr is expected to generate 1.36 times more return on investment than OPC Energy. However, JD is 1.36 times more volatile than OPC Energy. It trades about -0.02 of its potential returns per unit of risk. OPC Energy is currently generating about -0.06 per unit of risk. If you would invest 3,935 in JD Inc Adr on January 19, 2024 and sell it today you would lose (1,384) from holding JD Inc Adr or give up 35.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 80.05% |
| Values | Daily Returns |
JD Inc Adr vs. OPC Energy
Performance |
| Timeline |
| JD Inc Adr |
| OPC Energy |
JD and OPC Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD and OPC Energy
The main advantage of trading using opposite JD and OPC Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD position performs unexpectedly, OPC Energy 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 OPC Energy will offset losses from the drop in OPC Energy's long position.The idea behind JD Inc Adr and OPC Energy 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.| OPC Energy vs. Doral Group Renewable | OPC Energy vs. Elbit Systems | OPC Energy vs. Electreon Wireless | OPC Energy vs. Delek Group |
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 AI Investment Finder module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |