Correlation Between JD SPORTS and NESTE OYJ
Can any of the company-specific risk be diversified away by investing in both JD SPORTS and NESTE OYJ 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 NESTE OYJ 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 NESTE OYJ UNSPADR, you can compare the effects of market volatilities on JD SPORTS and NESTE OYJ 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 NESTE OYJ. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD SPORTS and NESTE OYJ.
Diversification Opportunities for JD SPORTS and NESTE OYJ
Very weak diversification
The 3 months correlation between 9JD and NESTE is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding JD SPORTS FASH and NESTE OYJ UNSPADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NESTE OYJ UNSPADR 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 NESTE OYJ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NESTE OYJ UNSPADR has no effect on the direction of JD SPORTS i.e., JD SPORTS and NESTE OYJ go up and down completely randomly.
Pair Corralation between JD SPORTS and NESTE OYJ
Assuming the 90 days horizon JD SPORTS FASH is expected to under-perform the NESTE OYJ. But the stock apears to be less risky and, when comparing its historical volatility, JD SPORTS FASH is 1.25 times less risky than NESTE OYJ. The stock trades about -0.11 of its potential returns per unit of risk. The NESTE OYJ UNSPADR is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 540.00 in NESTE OYJ UNSPADR on December 27, 2024 and sell it today you would lose (108.00) from holding NESTE OYJ UNSPADR or give up 20.0% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
JD SPORTS FASH vs. NESTE OYJ UNSPADR
Performance |
Timeline |
JD SPORTS FASH |
NESTE OYJ UNSPADR |
JD SPORTS and NESTE OYJ Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with JD SPORTS and NESTE OYJ
The main advantage of trading using opposite JD SPORTS and NESTE OYJ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD SPORTS position performs unexpectedly, NESTE OYJ 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 NESTE OYJ will offset losses from the drop in NESTE OYJ's long position.JD SPORTS vs. TFS FINANCIAL | JD SPORTS vs. REVO INSURANCE SPA | JD SPORTS vs. H2O Retailing | JD SPORTS vs. National Retail Properties |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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