Correlation Between Grieg Seafood and JD Sports
Can any of the company-specific risk be diversified away by investing in both Grieg Seafood 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 Grieg Seafood and JD Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grieg Seafood and JD Sports Fashion, you can compare the effects of market volatilities on Grieg Seafood 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 Grieg Seafood with a short position of JD Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grieg Seafood and JD Sports.
Diversification Opportunities for Grieg Seafood and JD Sports
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Grieg and JD Sports is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Grieg Seafood 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 Grieg Seafood 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 Grieg Seafood 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 Grieg Seafood i.e., Grieg Seafood and JD Sports go up and down completely randomly.
Pair Corralation between Grieg Seafood and JD Sports
Assuming the 90 days trading horizon Grieg Seafood is expected to generate 0.82 times more return on investment than JD Sports. However, Grieg Seafood is 1.22 times less risky than JD Sports. It trades about -0.01 of its potential returns per unit of risk. JD Sports Fashion is currently generating about -0.02 per unit of risk. If you would invest 7,686 in Grieg Seafood on October 11, 2024 and sell it today you would lose (1,768) from holding Grieg Seafood or give up 23.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grieg Seafood vs. JD Sports Fashion
Performance |
| Timeline |
| Grieg Seafood |
| JD Sports Fashion |
Grieg Seafood and JD Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grieg Seafood and JD Sports
The main advantage of trading using opposite Grieg Seafood and JD Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grieg Seafood 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.| Grieg Seafood vs. Seche Environnement SA | Grieg Seafood vs. Hochschild Mining plc | Grieg Seafood vs. Anglo Asian Mining | Grieg Seafood vs. Air Products Chemicals |
| JD Sports vs. Anglo Asian Mining | JD Sports vs. Grieg Seafood | JD Sports vs. Austevoll Seafood ASA | JD Sports vs. Coeur Mining |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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