Correlation Between JD Sports and Vitalhub Corp

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

Diversification Opportunities for JD Sports and Vitalhub Corp

0.32

Correlation Coefficient

JD Sports  Vitalhub Corp

Weak diversification

The 3 months correlation between JDDSF and Vitalhub is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and Vitalhub Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vitalhub Corp 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 Vitalhub Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vitalhub Corp has no effect on the direction of JD Sports i.e., JD Sports and Vitalhub Corp go up and down completely randomly.

Pair Corralation between JD Sports and Vitalhub Corp

Assuming the 90 days horizon JD Sports Fashion is expected to under-perform the Vitalhub Corp. But the pink sheet apears to be less risky and, when comparing its historical volatility, JD Sports Fashion is 1.18 times less risky than Vitalhub Corp. The pink sheet trades about -0.17 of its potential returns per unit of risk. The Vitalhub Corp is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest  765.00  in Vitalhub Corp on December 21, 2024 and sell it today you would lose (150.00) from holding Vitalhub Corp or give up 19.61% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

JD Sports Fashion  vs.  Vitalhub Corp

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.

Vitalhub Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vitalhub Corp 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 fundamental drivers 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.

Pair Trading with JD Sports and Vitalhub Corp

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

The idea behind JD Sports Fashion and Vitalhub Corp 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.

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 Bonds Directory module to find actively traded corporate debentures issued by US companies.