Correlation Between Dolly Varden and JD Sports
Can any of the company-specific risk be diversified away by investing in both Dolly Varden 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 Dolly Varden and JD Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dolly Varden Silver and JD Sports Fashion, you can compare the effects of market volatilities on Dolly Varden 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 Dolly Varden with a short position of JD Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dolly Varden and JD Sports.
Diversification Opportunities for Dolly Varden and JD Sports
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dolly and JD Sports is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Dolly Varden Silver 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 Dolly Varden 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 Dolly Varden Silver 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 Dolly Varden i.e., Dolly Varden and JD Sports go up and down completely randomly.
Pair Corralation between Dolly Varden and JD Sports
Assuming the 90 days trading horizon Dolly Varden Silver is expected to under-perform the JD Sports. In addition to that, Dolly Varden is 1.05 times more volatile than JD Sports Fashion. It trades about -0.25 of its total potential returns per unit of risk. JD Sports Fashion is currently generating about -0.19 per unit of volatility. If you would invest 12,367 in JD Sports Fashion on September 1, 2024 and sell it today you would lose (2,187) from holding JD Sports Fashion or give up 17.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 54.55% |
| Values | Daily Returns |
Dolly Varden Silver vs. JD Sports Fashion
Performance |
| Timeline |
| Dolly Varden Silver |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
| JD Sports Fashion |
Dolly Varden and JD Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dolly Varden and JD Sports
The main advantage of trading using opposite Dolly Varden and JD Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dolly Varden 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.| Dolly Varden vs. PPHE Hotel Group | Dolly Varden vs. Infrastrutture Wireless Italiane | Dolly Varden vs. Trainline Plc | Dolly Varden vs. Gear4music Plc |
| JD Sports vs. Toyota Motor Corp | JD Sports vs. SoftBank Group Corp | JD Sports vs. OTP Bank Nyrt | JD Sports vs. Las Vegas Sands |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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