Correlation Between Fresh2 and JD Sports

Can any of the company-specific risk be diversified away by investing in both Fresh2 and JD Sports 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 Fresh2 and JD Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fresh2 Group and JD Sports Fashion, you can compare the effects of market volatilities on Fresh2 and JD Sports 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 Fresh2 with a short position of JD Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresh2 and JD Sports.

Diversification Opportunities for Fresh2 and JD Sports

0.0

Correlation Coefficient

Fresh2  JD Sports

Pay attention - limited upside

The 3 months correlation between Fresh2 and JDSPY is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fresh2 Group and JD Sports Fashion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JD Sports Fashion and Fresh2 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 Fresh2 Group are associated (or correlated) with JD Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JD Sports Fashion has no effect on the direction of Fresh2 i.e., Fresh2 and JD Sports go up and down completely randomly.

Pair Corralation between Fresh2 and JD Sports

If you would invest (100.00) in Fresh2 Group on December 20, 2024 and sell it today you would earn a total of  100.00  from holding Fresh2 Group or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Fresh2 Group  vs.  JD Sports Fashion

Fresh2 Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fresh2 Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Fresh2 is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

JD Sports Fashion

Risk-Adjusted Performance

Very Weak

Over the last 90 days JD Sports Fashion has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Fresh2 and JD Sports

The main advantage of trading using opposite Fresh2 and JD Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresh2 position performs unexpectedly, JD Sports 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 JD Sports will offset losses from the drop in JD Sports' long position.

The idea behind Fresh2 Group and JD Sports Fashion 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.