Correlation Between Chocoladefabriken and JD Sports
Can any of the company-specific risk be diversified away by investing in both Chocoladefabriken 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 Chocoladefabriken and JD Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chocoladefabriken Lindt Spruengli and JD Sports Fashion, you can compare the effects of market volatilities on Chocoladefabriken 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 Chocoladefabriken with a short position of JD Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chocoladefabriken and JD Sports.
Diversification Opportunities for Chocoladefabriken and JD Sports
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chocoladefabriken and JD Sports is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Chocoladefabriken Lindt Spruen 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 Chocoladefabriken 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 Chocoladefabriken Lindt Spruengli 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 Chocoladefabriken i.e., Chocoladefabriken and JD Sports go up and down completely randomly.
Pair Corralation between Chocoladefabriken and JD Sports
Assuming the 90 days trading horizon Chocoladefabriken Lindt Spruengli is expected to generate 0.32 times more return on investment than JD Sports. However, Chocoladefabriken Lindt Spruengli is 3.13 times less risky than JD Sports. It trades about 0.15 of its potential returns per unit of risk. JD Sports Fashion is currently generating about -0.07 per unit of risk. If you would invest 10,040,000 in Chocoladefabriken Lindt Spruengli on November 4, 2024 and sell it today you would earn a total of 320,000 from holding Chocoladefabriken Lindt Spruengli or generate 3.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chocoladefabriken Lindt Spruen vs. JD Sports Fashion
Performance |
| Timeline |
| Chocoladefabriken Lindt |
| JD Sports Fashion |
Chocoladefabriken and JD Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chocoladefabriken and JD Sports
The main advantage of trading using opposite Chocoladefabriken and JD Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chocoladefabriken 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.| Chocoladefabriken vs. Seraphim Space Investment | Chocoladefabriken vs. New Residential Investment | Chocoladefabriken vs. Chrysalis Investments | Chocoladefabriken vs. Universal Music Group |
| JD Sports vs. Bytes Technology | JD Sports vs. iShares Physical Silver | JD Sports vs. Spotify Technology SA | JD Sports vs. Auction Technology Group |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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