Correlation Between Cembra Money and JD Sports
Can any of the company-specific risk be diversified away by investing in both Cembra Money 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 Cembra Money and JD Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cembra Money Bank and JD Sports Fashion, you can compare the effects of market volatilities on Cembra Money 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 Cembra Money with a short position of JD Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cembra Money and JD Sports.
Diversification Opportunities for Cembra Money and JD Sports
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cembra and JD Sports is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Cembra Money Bank 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 Cembra Money 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 Cembra Money Bank 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 Cembra Money i.e., Cembra Money and JD Sports go up and down completely randomly.
Pair Corralation between Cembra Money and JD Sports
Assuming the 90 days trading horizon Cembra Money is expected to generate 1.59 times less return on investment than JD Sports. But when comparing it to its historical volatility, Cembra Money Bank is 2.29 times less risky than JD Sports. It trades about 0.06 of its potential returns per unit of risk. JD Sports Fashion is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 9,346 in JD Sports Fashion on September 23, 2024 and sell it today you would earn a total of 154.00 from holding JD Sports Fashion or generate 1.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cembra Money Bank vs. JD Sports Fashion
Performance |
| Timeline |
| Cembra Money Bank |
| JD Sports Fashion |
Cembra Money and JD Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cembra Money and JD Sports
The main advantage of trading using opposite Cembra Money and JD Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cembra Money 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.| Cembra Money vs. Uniper SE | Cembra Money vs. Mulberry Group PLC | Cembra Money vs. London Security Plc | Cembra Money vs. Triad Group PLC |
| JD Sports vs. MT Bank Corp | JD Sports vs. Sparebank 1 SR | JD Sports vs. Cembra Money Bank | JD Sports vs. Panther Metals PLC |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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