Correlation Between Prosiebensat and JD Sports
Can any of the company-specific risk be diversified away by investing in both Prosiebensat 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 Prosiebensat and JD Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prosiebensat 1 Media and JD Sports Fashion, you can compare the effects of market volatilities on Prosiebensat 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 Prosiebensat with a short position of JD Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prosiebensat and JD Sports.
Diversification Opportunities for Prosiebensat and JD Sports
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Prosiebensat and JD Sports is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Prosiebensat 1 Media 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 Prosiebensat 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 Prosiebensat 1 Media 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 Prosiebensat i.e., Prosiebensat and JD Sports go up and down completely randomly.
Pair Corralation between Prosiebensat and JD Sports
Assuming the 90 days trading horizon Prosiebensat is expected to generate 5.09 times less return on investment than JD Sports. But when comparing it to its historical volatility, Prosiebensat 1 Media is 2.69 times less risky than JD Sports. It trades about 0.05 of its potential returns per unit of risk. JD Sports Fashion is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 7,278 in JD Sports Fashion on January 26, 2025 and sell it today you would earn a total of 476.00 from holding JD Sports Fashion or generate 6.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prosiebensat 1 Media vs. JD Sports Fashion
Performance |
| Timeline |
| Prosiebensat 1 Media |
| JD Sports Fashion |
Prosiebensat and JD Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prosiebensat and JD Sports
The main advantage of trading using opposite Prosiebensat and JD Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prosiebensat 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.| Prosiebensat vs. Temple Bar Investment | Prosiebensat vs. Dairy Farm International | Prosiebensat vs. Infrastrutture Wireless Italiane | Prosiebensat vs. Axfood AB |
| JD Sports vs. Charter Communications Cl | JD Sports vs. Young Cos Brewery | JD Sports vs. Zegona Communications Plc | JD Sports vs. National Beverage Corp |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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