Correlation Between MEDIFAST INC and JD
Can any of the company-specific risk be diversified away by investing in both MEDIFAST INC 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 MEDIFAST INC and JD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MEDIFAST INC and JD Inc Adr, you can compare the effects of market volatilities on MEDIFAST INC 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 MEDIFAST INC with a short position of JD. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEDIFAST INC and JD.
Diversification Opportunities for MEDIFAST INC and JD
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MEDIFAST and JD is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding MEDIFAST INC 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 MEDIFAST 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 MEDIFAST INC 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 Inc Adr has no effect on the direction of MEDIFAST INC i.e., MEDIFAST INC and JD go up and down completely randomly.
Pair Corralation between MEDIFAST INC and JD
Considering the 90-day investment horizon MEDIFAST INC is expected to under-perform the JD. But the stock apears to be less risky and, when comparing its historical volatility, MEDIFAST INC is 1.05 times less risky than JD. The stock trades about -0.13 of its potential returns per unit of risk. The JD Inc Adr is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 3,374 in JD Inc Adr on January 19, 2024 and sell it today you would lose (828.00) from holding JD Inc Adr or give up 24.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MEDIFAST INC vs. JD Inc Adr
Performance |
| Timeline |
| MEDIFAST INC |
| JD Inc Adr |
MEDIFAST INC and JD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MEDIFAST INC and JD
The main advantage of trading using opposite MEDIFAST INC and JD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEDIFAST INC 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.| MEDIFAST INC vs. Rollins | MEDIFAST INC vs. Carriage Services | MEDIFAST INC vs. Service International | MEDIFAST INC vs. Bright Horizons Family |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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