Correlation Between JD Sports and Eastern
Can any of the company-specific risk be diversified away by investing in both JD Sports and Eastern 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 Eastern 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 Eastern Co, you can compare the effects of market volatilities on JD Sports and Eastern 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 Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and Eastern.
Diversification Opportunities for JD Sports and Eastern
Very good diversification
The 3 months correlation between JDDSF and Eastern is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and Eastern Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern 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 Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern has no effect on the direction of JD Sports i.e., JD Sports and Eastern go up and down completely randomly.
Pair Corralation between JD Sports and Eastern
Assuming the 90 days horizon JD Sports Fashion is expected to under-perform the Eastern. In addition to that, JD Sports is 1.23 times more volatile than Eastern Co. It trades about -0.17 of its total potential returns per unit of risk. Eastern Co is currently generating about 0.02 per unit of volatility. If you would invest 2,625 in Eastern Co on December 28, 2024 and sell it today you would earn a total of 48.00 from holding Eastern Co or generate 1.83% 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. Eastern Co
Performance |
Timeline |
JD Sports Fashion |
Eastern |
JD Sports and Eastern Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with JD Sports and Eastern
The main advantage of trading using opposite JD Sports and Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports position performs unexpectedly, Eastern 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 Eastern will offset losses from the drop in Eastern's long position.JD Sports vs. Burlington Stores | JD Sports vs. Childrens Place | JD Sports vs. Buckle Inc | JD Sports vs. Shoe Carnival |
Eastern vs. Timken Company | Eastern vs. Hillman Solutions Corp | Eastern vs. AB SKF | Eastern vs. Kennametal |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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