Correlation Between JD Sports and MDB Capital

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

Diversification Opportunities for JD Sports and MDB Capital

-0.28

Correlation Coefficient

JD Sports  MDB Capital

Very good diversification

The 3 months correlation between JDDSF and MDB is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and MDB Capital Holdings, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MDB Capital Holdings, 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 MDB Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MDB Capital Holdings, has no effect on the direction of JD Sports i.e., JD Sports and MDB Capital go up and down completely randomly.

Pair Corralation between JD Sports and MDB Capital

If you would invest  625.00  in MDB Capital Holdings, on October 11, 2024 and sell it today you would earn a total of  16.00  from holding MDB Capital Holdings, or generate 2.56% 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.  MDB Capital Holdings,

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.

MDB Capital Holdings,

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MDB Capital Holdings, are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental drivers, MDB Capital is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with JD Sports and MDB Capital

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

The idea behind JD Sports Fashion and MDB Capital Holdings, 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.

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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.