Correlation Between 26444HAL5 and JD Sports

Can any of the company-specific risk be diversified away by investing in both 26444HAL5 and JD Sports 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 26444HAL5 and JD Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between DUK 3 15 DEC 51 and JD Sports Fashion, you can compare the effects of market volatilities on 26444HAL5 and JD Sports 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 26444HAL5 with a short position of JD Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of 26444HAL5 and JD Sports.

Diversification Opportunities for 26444HAL5 and JD Sports

0.14

Correlation Coefficient

26444HAL5  JD Sports

Average diversification

The 3 months correlation between 26444HAL5 and JDDSF is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding DUK 3 15 DEC 51 and JD Sports Fashion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JD Sports Fashion and 26444HAL5 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 DUK 3 15 DEC 51 are associated (or correlated) with JD Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JD Sports Fashion has no effect on the direction of 26444HAL5 i.e., 26444HAL5 and JD Sports go up and down completely randomly.

Pair Corralation between 26444HAL5 and JD Sports

Assuming the 90 days trading horizon 26444HAL5 is expected to generate 1.26 times less return on investment than JD Sports. But when comparing it to its historical volatility, DUK 3 15 DEC 51 is 1.6 times less risky than JD Sports. It trades about 0.03 of its potential returns per unit of risk. JD Sports Fashion is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  109.00  in JD Sports Fashion on October 25, 2024 and sell it today you would earn a total of  8.00  from holding JD Sports Fashion or generate 7.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	58.82%
Values	Daily Returns

DUK 3 15 DEC 51  vs.  JD Sports Fashion

26444HAL5

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in DUK 3 15 DEC 51 are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile basic indicators, 26444HAL5 sustained solid returns over the last few months and may actually be approaching a breakup point.

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

Pair Trading with 26444HAL5 and JD Sports

The main advantage of trading using opposite 26444HAL5 and JD Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 26444HAL5 position performs unexpectedly, JD Sports 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 JD Sports will offset losses from the drop in JD Sports' long position.

The idea behind DUK 3 15 DEC 51 and JD Sports Fashion 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.