Correlation Between JD Sports and OCBCSP

Can any of the company-specific risk be diversified away by investing in both JD Sports and OCBCSP 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 OCBCSP 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 OCBCSP 1832 10 SEP 30, you can compare the effects of market volatilities on JD Sports and OCBCSP 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 OCBCSP. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and OCBCSP.

Diversification Opportunities for JD Sports and OCBCSP

-0.22

Correlation Coefficient

JD Sports  OCBCSP

Very good diversification

The 3 months correlation between JDDSF and OCBCSP is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and OCBCSP 1832 10 SEP 30 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OCBCSP 1832 10 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 OCBCSP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OCBCSP 1832 10 has no effect on the direction of JD Sports i.e., JD Sports and OCBCSP go up and down completely randomly.

Pair Corralation between JD Sports and OCBCSP

Assuming the 90 days horizon JD Sports Fashion is expected to generate 1.06 times more return on investment than OCBCSP. However, JD Sports is 1.06 times more volatile than OCBCSP 1832 10 SEP 30. It trades about -0.15 of its potential returns per unit of risk. OCBCSP 1832 10 SEP 30 is currently generating about -0.59 per unit of risk. If you would invest  177.00  in JD Sports Fashion on September 23, 2024 and sell it today you would lose (31.00) from holding JD Sports Fashion or give up 17.51% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	11.63%
Values	Daily Returns

JD Sports Fashion  vs.  OCBCSP 1832 10 SEP 30

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.

OCBCSP 1832 10

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days OCBCSP 1832 10 SEP 30 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for OCBCSP 1832 10 SEP 30 investors.

Pair Trading with JD Sports and OCBCSP

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

The idea behind JD Sports Fashion and OCBCSP 1832 10 SEP 30 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.