Correlation Between JD SPORTS and SSP Group

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

Diversification Opportunities for JD SPORTS and SSP Group

-0.44

Correlation Coefficient

JD SPORTS  SSP Group

Very good diversification

The 3 months correlation between 9JD and SSP is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding JD SPORTS FASH and SSP Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSP Group PLC 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 SSP Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSP Group PLC has no effect on the direction of JD SPORTS i.e., JD SPORTS and SSP Group go up and down completely randomly.

Pair Corralation between JD SPORTS and SSP Group

Assuming the 90 days horizon JD SPORTS FASH is expected to under-perform the SSP Group. In addition to that, JD SPORTS is 1.53 times more volatile than SSP Group PLC. It trades about -0.02 of its total potential returns per unit of risk. SSP Group PLC is currently generating about -0.02 per unit of volatility. If you would invest  278.00  in SSP Group PLC on October 20, 2024 and sell it today you would lose (77.00) from holding SSP Group PLC or give up 27.7% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

JD SPORTS FASH  vs.  SSP Group PLC

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.

SSP Group PLC

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SSP Group PLC are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, SSP Group is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with JD SPORTS and SSP Group

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

The idea behind JD SPORTS FASH and SSP Group PLC 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.