Correlation Between JD Sports and TBC Bank

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

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

Diversification Opportunities for JD Sports and TBC Bank

-0.79

Correlation Coefficient

JD Sports  TBC Bank

Pay attention - limited upside

The 3 months correlation between JD Sports and TBC is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and TBC Bank Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TBC Bank Group 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 Fashion are associated (or correlated) with TBC Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TBC Bank Group has no effect on the direction of JD Sports i.e., JD Sports and TBC Bank go up and down completely randomly.

Pair Corralation between JD Sports and TBC Bank

Assuming the 90 days trading horizon JD Sports Fashion is expected to under-perform the TBC Bank. In addition to that, JD Sports is 1.34 times more volatile than TBC Bank Group. It trades about -0.07 of its total potential returns per unit of risk. TBC Bank Group is currently generating about 0.0 per unit of volatility. If you would invest  306,000  in TBC Bank Group on October 9, 2024 and sell it today you would lose (500.00) from holding TBC Bank Group or give up 0.16% of portfolio value over 90 days.

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

JD Sports Fashion  vs.  TBC Bank Group

JD Sports Fashion

Risk-Adjusted Performance

0 of 100

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 unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

TBC Bank Group

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TBC Bank Group are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, TBC Bank unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JD Sports and TBC Bank

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

The idea behind JD Sports Fashion and TBC Bank Group 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.