Correlation Between JD and QVC

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

Diversification Opportunities for JD and QVC

0.55

Correlation Coefficient

JD  QVC

Very weak diversification

The 3 months correlation between JD and QVC is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding JD Inc Adr and QVC Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QVC Group 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 QVC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QVC Group has no effect on the direction of JD i.e., JD and QVC go up and down completely randomly.

Pair Corralation between JD and QVC

Allowing for the 90-day total investment horizon JD Inc Adr is expected to generate 0.18 times more return on investment than QVC. However, JD Inc Adr is 5.43 times less risky than QVC. It trades about -0.04 of its potential returns per unit of risk. QVC Group is currently generating about -0.01 per unit of risk. If you would invest  3,435  in JD Inc Adr on May 15, 2025 and sell it today you would lose (184.00) from holding JD Inc Adr or give up 5.36% of portfolio value over 90 days.

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

JD Inc Adr  vs.  QVC Group

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 rather sound fundamental indicators, JD is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

QVC Group

Risk-Adjusted Performance

Weakest

Over the last 90 days QVC Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with JD and QVC

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

The idea behind JD Inc Adr and QVC Group 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.