Correlation Between GFL ENVIRONM and JD SPORTS
Can any of the company-specific risk be diversified away by investing in both GFL ENVIRONM 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 GFL ENVIRONM and JD SPORTS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GFL ENVIRONM and JD SPORTS FASH, you can compare the effects of market volatilities on GFL ENVIRONM 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 GFL ENVIRONM with a short position of JD SPORTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of GFL ENVIRONM and JD SPORTS.
Diversification Opportunities for GFL ENVIRONM and JD SPORTS
-0.93 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GFL and 9JD is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding GFL ENVIRONM and JD SPORTS FASH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JD SPORTS FASH and GFL ENVIRONM 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 GFL ENVIRONM 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 FASH has no effect on the direction of GFL ENVIRONM i.e., GFL ENVIRONM and JD SPORTS go up and down completely randomly.
Pair Corralation between GFL ENVIRONM and JD SPORTS
Assuming the 90 days horizon GFL ENVIRONM is expected to generate 0.91 times more return on investment than JD SPORTS. However, GFL ENVIRONM is 1.1 times less risky than JD SPORTS. It trades about -0.06 of its potential returns per unit of risk. JD SPORTS FASH is currently generating about -0.18 per unit of risk. If you would invest 4,420 in GFL ENVIRONM on September 28, 2024 and sell it today you would lose (80.00) from holding GFL ENVIRONM or give up 1.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GFL ENVIRONM vs. JD SPORTS FASH
Performance |
| Timeline |
| GFL ENVIRONM |
| JD SPORTS FASH |
GFL ENVIRONM and JD SPORTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GFL ENVIRONM and JD SPORTS
The main advantage of trading using opposite GFL ENVIRONM and JD SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GFL ENVIRONM 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's long position.| GFL ENVIRONM vs. Republic Services | GFL ENVIRONM vs. Waste Connections | GFL ENVIRONM vs. Veolia Environnement SA | GFL ENVIRONM vs. Veolia Environnement SA |
| JD SPORTS vs. CVS Health | JD SPORTS vs. Vishay Intertechnology | JD SPORTS vs. DXC Technology Co | JD SPORTS vs. HEALTHCARE REAL A |
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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