Correlation Between JD and Quantumscape Corp

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

Diversification Opportunities for JD and Quantumscape Corp

-0.29

Correlation Coefficient

JD  Quantumscape Corp

Very good diversification

The 3 months correlation between JD and Quantumscape is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding JD Inc Adr and Quantumscape Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quantumscape 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 Quantumscape Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quantumscape Corp has no effect on the direction of JD i.e., JD and Quantumscape Corp go up and down completely randomly.

Pair Corralation between JD and Quantumscape Corp

Allowing for the 90-day total investment horizon JD Inc Adr is expected to under-perform the Quantumscape Corp. But the stock apears to be less risky and, when comparing its historical volatility, JD Inc Adr is 4.57 times less risky than Quantumscape Corp. The stock trades about -0.1 of its potential returns per unit of risk. The Quantumscape Corp is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  428.00  in Quantumscape Corp on May 11, 2025 and sell it today you would earn a total of  448.00  from holding Quantumscape Corp or generate 104.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

JD Inc Adr  vs.  Quantumscape Corp

JD Inc Adr

Risk-Adjusted Performance

Weakest

Over the last 90 days JD Inc Adr has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Quantumscape Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Quantumscape Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Quantumscape Corp unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JD and Quantumscape Corp

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

The idea behind JD Inc Adr and Quantumscape 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.