Correlation Between JD Sports and Qualys

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

Diversification Opportunities for JD Sports and Qualys

0.38

Correlation Coefficient

JD Sports  Qualys

Weak diversification

The 3 months correlation between JDDSF and Qualys is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and Qualys Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qualys 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 Qualys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qualys Inc has no effect on the direction of JD Sports i.e., JD Sports and Qualys go up and down completely randomly.

Pair Corralation between JD Sports and Qualys

Assuming the 90 days horizon JD Sports Fashion is expected to under-perform the Qualys. In addition to that, JD Sports is 1.58 times more volatile than Qualys Inc. It trades about -0.17 of its total potential returns per unit of risk. Qualys Inc is currently generating about -0.05 per unit of volatility. If you would invest  14,073  in Qualys Inc on December 20, 2024 and sell it today you would lose (856.00) from holding Qualys Inc or give up 6.08% of portfolio value over 90 days.

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

JD Sports Fashion  vs.  Qualys Inc

JD Sports Fashion

Risk-Adjusted Performance

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 uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Qualys Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Qualys Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Qualys is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with JD Sports and Qualys

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

The idea behind JD Sports Fashion and Qualys 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.

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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.