Correlation Between SFCCN and JD Sports

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

By analyzing existing cross correlation between SFCCN 53 13 MAY 28 and JD Sports Fashion, you can compare the effects of market volatilities on SFCCN 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 SFCCN with a short position of JD Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of SFCCN and JD Sports.

Diversification Opportunities for SFCCN and JD Sports

-0.57

Correlation Coefficient

SFCCN  JD Sports

Excellent diversification

The 3 months correlation between SFCCN and JDDSF is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding SFCCN 53 13 MAY 28 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 SFCCN 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 SFCCN 53 13 MAY 28 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 SFCCN i.e., SFCCN and JD Sports go up and down completely randomly.

Pair Corralation between SFCCN and JD Sports

Assuming the 90 days trading horizon SFCCN 53 13 MAY 28 is expected to generate 0.37 times more return on investment than JD Sports. However, SFCCN 53 13 MAY 28 is 2.71 times less risky than JD Sports. It trades about -0.16 of its potential returns per unit of risk. JD Sports Fashion is currently generating about -0.17 per unit of risk. If you would invest  9,794  in SFCCN 53 13 MAY 28 on December 30, 2024 and sell it today you would lose (212.00) from holding SFCCN 53 13 MAY 28 or give up 2.16% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	20.97%
Values	Daily Returns

SFCCN 53 13 MAY 28  vs.  JD Sports Fashion

SFCCN 53 13

Risk-Adjusted Performance

Very Weak

Over the last 90 days SFCCN 53 13 MAY 28 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for SFCCN 53 13 MAY 28 investors.

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.

Pair Trading with SFCCN and JD Sports

The main advantage of trading using opposite SFCCN and JD Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SFCCN 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 SFCCN 53 13 MAY 28 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.