Correlation Between JD SPORTS and Firan Technology

Can any of the company-specific risk be diversified away by investing in both JD SPORTS and Firan Technology 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 SPORTS and Firan Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between JD SPORTS FASH and Firan Technology Group, you can compare the effects of market volatilities on JD SPORTS and Firan Technology 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 SPORTS with a short position of Firan Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD SPORTS and Firan Technology.

Diversification Opportunities for JD SPORTS and Firan Technology

-0.77

Correlation Coefficient

JD SPORTS  Firan Technology

Pay attention - limited upside

The 3 months correlation between 9JD and Firan is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding JD SPORTS FASH and Firan Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firan Technology and JD SPORTS 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 SPORTS FASH are associated (or correlated) with Firan Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Firan Technology has no effect on the direction of JD SPORTS i.e., JD SPORTS and Firan Technology go up and down completely randomly.

Pair Corralation between JD SPORTS and Firan Technology

Assuming the 90 days horizon JD SPORTS FASH is expected to under-perform the Firan Technology. In addition to that, JD SPORTS is 1.51 times more volatile than Firan Technology Group. It trades about -0.31 of its total potential returns per unit of risk. Firan Technology Group is currently generating about -0.07 per unit of volatility. If you would invest  490.00  in Firan Technology Group on October 11, 2024 and sell it today you would lose (8.00) from holding Firan Technology Group or give up 1.63% of portfolio value over 90 days.

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

JD SPORTS FASH  vs.  Firan Technology Group

JD SPORTS FASH

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JD SPORTS FASH has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Firan Technology

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Firan Technology Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Firan Technology may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with JD SPORTS and Firan Technology

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

The idea behind JD SPORTS FASH and Firan Technology 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..