Correlation Between National Bank and JD Sports
Can any of the company-specific risk be diversified away by investing in both National Bank 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 National Bank and JD Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Bank of and JD Sports Fashion, you can compare the effects of market volatilities on National Bank 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 National Bank with a short position of JD Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bank and JD Sports.
Diversification Opportunities for National Bank and JD Sports
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between National and JD Sports is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding National Bank of 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 National Bank 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 National Bank of 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 National Bank i.e., National Bank and JD Sports go up and down completely randomly.
Pair Corralation between National Bank and JD Sports
Assuming the 90 days trading horizon National Bank of is expected to generate 0.44 times more return on investment than JD Sports. However, National Bank of is 2.26 times less risky than JD Sports. It trades about 0.04 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 241.00 in National Bank of on September 12, 2024 and sell it today you would earn a total of 37.00 from holding National Bank of or generate 15.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Bank of vs. JD Sports Fashion
Performance |
| Timeline |
| National Bank |
| JD Sports Fashion |
National Bank and JD Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Bank and JD Sports
The main advantage of trading using opposite National Bank and JD Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Bank 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.| National Bank vs. Hong Kong Land | National Bank vs. Neometals | National Bank vs. Coor Service Management | National Bank vs. Fidelity Sustainable USD |
| JD Sports vs. National Atomic Co | JD Sports vs. OTP Bank Nyrt | JD Sports vs. Samsung Electronics Co | JD Sports vs. Samsung Electronics Co |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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