Correlation Between JD Sports and CXApp

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

Diversification Opportunities for JD Sports and CXApp

0.82

Correlation Coefficient

JD Sports  CXApp

Very poor diversification

The 3 months correlation between JDSPY and CXApp is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and CXApp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CXApp 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 CXApp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CXApp Inc has no effect on the direction of JD Sports i.e., JD Sports and CXApp go up and down completely randomly.

Pair Corralation between JD Sports and CXApp

Assuming the 90 days horizon JD Sports Fashion is expected to generate 0.7 times more return on investment than CXApp. However, JD Sports Fashion is 1.43 times less risky than CXApp. It trades about -0.05 of its potential returns per unit of risk. CXApp Inc is currently generating about -0.11 per unit of risk. If you would invest  112.00  in JD Sports Fashion on December 19, 2024 and sell it today you would lose (15.00) from holding JD Sports Fashion or give up 13.39% of portfolio value over 90 days.

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

JD Sports Fashion  vs.  CXApp 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. In spite of latest conflicting performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

CXApp Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days CXApp Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's forward indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with JD Sports and CXApp

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

The idea behind JD Sports Fashion and CXApp 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.