Correlation Between JD SPORTS and DAIDO METAL

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

Diversification Opportunities for JD SPORTS and DAIDO METAL

-0.3

Correlation Coefficient

JD SPORTS  DAIDO METAL

Very good diversification

The 3 months correlation between 9JD and DAIDO is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding JD SPORTS FASH and DAIDO METAL TD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DAIDO METAL TD 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 DAIDO METAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DAIDO METAL TD has no effect on the direction of JD SPORTS i.e., JD SPORTS and DAIDO METAL go up and down completely randomly.

Pair Corralation between JD SPORTS and DAIDO METAL

Assuming the 90 days horizon JD SPORTS FASH is expected to under-perform the DAIDO METAL. In addition to that, JD SPORTS is 2.3 times more volatile than DAIDO METAL TD. It trades about -0.2 of its total potential returns per unit of risk. DAIDO METAL TD is currently generating about 0.05 per unit of volatility. If you would invest  278.00  in DAIDO METAL TD on October 25, 2024 and sell it today you would earn a total of  10.00  from holding DAIDO METAL TD or generate 3.6% return on investment over 90 days.

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

JD SPORTS FASH  vs.  DAIDO METAL TD

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 fragile 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.

DAIDO METAL TD

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in DAIDO METAL TD are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, DAIDO METAL is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with JD SPORTS and DAIDO METAL

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

The idea behind JD SPORTS FASH and DAIDO METAL TD 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.

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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..