Correlation Between JD Sports and China Aircraft
Can any of the company-specific risk be diversified away by investing in both JD Sports and China Aircraft 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 China Aircraft 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 China Aircraft Leasing, you can compare the effects of market volatilities on JD Sports and China Aircraft 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 China Aircraft. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and China Aircraft.
Diversification Opportunities for JD Sports and China Aircraft
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between JDDSF and China is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and China Aircraft Leasing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Aircraft Leasing 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 China Aircraft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Aircraft Leasing has no effect on the direction of JD Sports i.e., JD Sports and China Aircraft go up and down completely randomly.
Pair Corralation between JD Sports and China Aircraft
Assuming the 90 days horizon JD Sports Fashion is expected to under-perform the China Aircraft. In addition to that, JD Sports is 1.25 times more volatile than China Aircraft Leasing. It trades about -0.17 of its total potential returns per unit of risk. China Aircraft Leasing is currently generating about 0.13 per unit of volatility. If you would invest 40.00 in China Aircraft Leasing on December 28, 2024 and sell it today you would earn a total of 7.00 from holding China Aircraft Leasing or generate 17.5% 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. China Aircraft Leasing
Performance |
Timeline |
JD Sports Fashion |
China Aircraft Leasing |
JD Sports and China Aircraft Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with JD Sports and China Aircraft
The main advantage of trading using opposite JD Sports and China Aircraft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports position performs unexpectedly, China Aircraft 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 China Aircraft will offset losses from the drop in China Aircraft's long position.JD Sports vs. Burlington Stores | JD Sports vs. Childrens Place | JD Sports vs. Buckle Inc | JD Sports vs. Shoe Carnival |
China Aircraft vs. Weibo Corp | China Aircraft vs. Coupang LLC | China Aircraft vs. National CineMedia | China Aircraft vs. Esperion Therapeutics |
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.
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