Correlation Between JD Sports and 020002AJ0

Can any of the company-specific risk be diversified away by investing in both JD Sports and 020002AJ0 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 020002AJ0 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 ALL 69 15 MAY 38, you can compare the effects of market volatilities on JD Sports and 020002AJ0 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 020002AJ0. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and 020002AJ0.

Diversification Opportunities for JD Sports and 020002AJ0

0.65

Correlation Coefficient

JD Sports  020002AJ0

Poor diversification

The 3 months correlation between JDDSF and 020002AJ0 is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and ALL 69 15 MAY 38 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALL 69 15 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 020002AJ0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALL 69 15 has no effect on the direction of JD Sports i.e., JD Sports and 020002AJ0 go up and down completely randomly.

Pair Corralation between JD Sports and 020002AJ0

Assuming the 90 days horizon JD Sports Fashion is expected to under-perform the 020002AJ0. But the pink sheet apears to be less risky and, when comparing its historical volatility, JD Sports Fashion is 1.09 times less risky than 020002AJ0. The pink sheet trades about -0.04 of its potential returns per unit of risk. The ALL 69 15 MAY 38 is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  11,637  in ALL 69 15 MAY 38 on October 8, 2024 and sell it today you would earn a total of  138.00  from holding ALL 69 15 MAY 38 or generate 1.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	59.68%
Values	Daily Returns

JD Sports Fashion  vs.  ALL 69 15 MAY 38

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 current stock price disturbance, may contribute to mid-run losses for the stockholders.

ALL 69 15

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ALL 69 15 MAY 38 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 020002AJ0 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with JD Sports and 020002AJ0

The main advantage of trading using opposite JD Sports and 020002AJ0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports position performs unexpectedly, 020002AJ0 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 020002AJ0 will offset losses from the drop in 020002AJ0's long position.

The idea behind JD Sports Fashion and ALL 69 15 MAY 38 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..