Correlation Between JD and Dallasnews Corp

Can any of the company-specific risk be diversified away by investing in both JD and Dallasnews Corp 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 Dallasnews Corp 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 Dallasnews Corp, you can compare the effects of market volatilities on JD and Dallasnews Corp 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 Dallasnews Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD and Dallasnews Corp.

Diversification Opportunities for JD and Dallasnews Corp

-0.61

Correlation Coefficient

JD  Dallasnews Corp

Excellent diversification

The 3 months correlation between JD and Dallasnews is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding JD Inc Adr and Dallasnews Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dallasnews Corp 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 Dallasnews Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dallasnews Corp has no effect on the direction of JD i.e., JD and Dallasnews Corp go up and down completely randomly.

Pair Corralation between JD and Dallasnews Corp

Allowing for the 90-day total investment horizon JD is expected to generate 2.28 times less return on investment than Dallasnews Corp. In addition to that, JD is 1.81 times more volatile than Dallasnews Corp. It trades about 0.03 of its total potential returns per unit of risk. Dallasnews Corp is currently generating about 0.12 per unit of volatility. If you would invest  370.00  in Dallasnews Corp on March 2, 2024 and sell it today you would earn a total of  17.00  from holding Dallasnews Corp or generate 4.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

JD Inc Adr  vs.  Dallasnews Corp

JD Inc Adr

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in JD Inc Adr are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent fundamental indicators, JD exhibited solid returns over the last few months and may actually be approaching a breakup point.

Dallasnews Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dallasnews Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, Dallasnews Corp is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with JD and Dallasnews Corp

The main advantage of trading using opposite JD and Dallasnews Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD position performs unexpectedly, Dallasnews Corp 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 Dallasnews Corp will offset losses from the drop in Dallasnews Corp's long position.

The idea behind JD Inc Adr and Dallasnews Corp 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.