Correlation Between JD and Copart

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

Diversification Opportunities for JD and Copart

0.32

Correlation Coefficient

JD  Copart

Weak diversification

The 3 months correlation between JD and Copart is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding JD Inc Adr and Copart Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Copart Inc 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 Copart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Copart Inc has no effect on the direction of JD i.e., JD and Copart go up and down completely randomly.

Pair Corralation between JD and Copart

Allowing for the 90-day total investment horizon JD Inc Adr is expected to generate 1.57 times more return on investment than Copart. However, JD is 1.57 times more volatile than Copart Inc. It trades about -0.05 of its potential returns per unit of risk. Copart Inc is currently generating about -0.23 per unit of risk. If you would invest  3,181  in JD Inc Adr on August 26, 2025 and sell it today you would lose (275.00) from holding JD Inc Adr or give up 8.65% of portfolio value over 90 days.

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

JD Inc Adr  vs.  Copart Inc

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 unfluctuating 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.

Copart Inc

Risk-Adjusted Performance

Weakest

Over the last 90 days Copart Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in December 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with JD and Copart

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

The idea behind JD Inc Adr and Copart Inc 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..