Correlation Between JD Sports and C3 Ai

Can any of the company-specific risk be diversified away by investing in both JD Sports and C3 Ai 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 C3 Ai 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 C3 Ai Inc, you can compare the effects of market volatilities on JD Sports and C3 Ai 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 C3 Ai. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and C3 Ai.

Diversification Opportunities for JD Sports and C3 Ai

-0.33

Correlation Coefficient

JD Sports  C3 Ai

Very good diversification

The 3 months correlation between JDDSF and C3 Ai is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and C3 Ai Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on C3 Ai Inc 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 C3 Ai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of C3 Ai Inc has no effect on the direction of JD Sports i.e., JD Sports and C3 Ai go up and down completely randomly.

Pair Corralation between JD Sports and C3 Ai

Assuming the 90 days horizon JD Sports Fashion is expected to under-perform the C3 Ai. But the pink sheet apears to be less risky and, when comparing its historical volatility, JD Sports Fashion is 1.6 times less risky than C3 Ai. The pink sheet trades about -0.04 of its potential returns per unit of risk. The C3 Ai Inc is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  2,345  in C3 Ai Inc on September 3, 2024 and sell it today you would earn a total of  1,373  from holding C3 Ai Inc or generate 58.55% return on investment over 90 days.

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

JD Sports Fashion  vs.  C3 Ai Inc

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. Despite nearly stable basic indicators, JD Sports is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

C3 Ai Inc

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in C3 Ai Inc are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating forward indicators, C3 Ai demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JD Sports and C3 Ai

The main advantage of trading using opposite JD Sports and C3 Ai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports position performs unexpectedly, C3 Ai 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 C3 Ai will offset losses from the drop in C3 Ai's long position.

The idea behind JD Sports Fashion and C3 Ai Inc 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.