Correlation Between JD SPORTS and Nufarm
Can any of the company-specific risk be diversified away by investing in both JD SPORTS and Nufarm 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 Nufarm 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 Nufarm Limited, you can compare the effects of market volatilities on JD SPORTS and Nufarm 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 Nufarm. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD SPORTS and Nufarm.
Diversification Opportunities for JD SPORTS and Nufarm
Very good diversification
The 3 months correlation between 9JD and Nufarm is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding JD SPORTS FASH and Nufarm Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nufarm Limited 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 Nufarm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nufarm Limited has no effect on the direction of JD SPORTS i.e., JD SPORTS and Nufarm go up and down completely randomly.
Pair Corralation between JD SPORTS and Nufarm
Assuming the 90 days horizon JD SPORTS FASH is expected to under-perform the Nufarm. In addition to that, JD SPORTS is 1.78 times more volatile than Nufarm Limited. It trades about -0.1 of its total potential returns per unit of risk. Nufarm Limited is currently generating about 0.08 per unit of volatility. If you would invest 208.00 in Nufarm Limited on December 28, 2024 and sell it today you would earn a total of 18.00 from holding Nufarm Limited or generate 8.65% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
JD SPORTS FASH vs. Nufarm Limited
Performance |
Timeline |
JD SPORTS FASH |
Nufarm Limited |
JD SPORTS and Nufarm Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with JD SPORTS and Nufarm
The main advantage of trading using opposite JD SPORTS and Nufarm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD SPORTS position performs unexpectedly, Nufarm 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 Nufarm will offset losses from the drop in Nufarm's long position.JD SPORTS vs. ELECTRONIC ARTS | JD SPORTS vs. ARROW ELECTRONICS | JD SPORTS vs. STMicroelectronics NV | JD SPORTS vs. Maple Leaf Foods |
Nufarm vs. Nutrien | Nufarm vs. CF Industries Holdings | Nufarm vs. Yara International ASA | Nufarm vs. The Scotts Miracle Gro |
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 Stocks Directory module to find actively traded stocks across global markets.
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