Correlation Between Daito Trust and JD SPORTS
Can any of the company-specific risk be diversified away by investing in both Daito Trust 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 Daito Trust and JD SPORTS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daito Trust Construction and JD SPORTS FASH, you can compare the effects of market volatilities on Daito Trust 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 Daito Trust with a short position of JD SPORTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daito Trust and JD SPORTS.
Diversification Opportunities for Daito Trust and JD SPORTS
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Daito and 9JD is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Daito Trust Construction 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 Daito Trust 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 Daito Trust Construction 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 Daito Trust i.e., Daito Trust and JD SPORTS go up and down completely randomly.
Pair Corralation between Daito Trust and JD SPORTS
Assuming the 90 days horizon Daito Trust Construction is expected to generate 0.17 times more return on investment than JD SPORTS. However, Daito Trust Construction is 5.99 times less risky than JD SPORTS. It trades about 0.18 of its potential returns per unit of risk. JD SPORTS FASH is currently generating about -0.09 per unit of risk. If you would invest 9,950 in Daito Trust Construction on August 25, 2024 and sell it today you would earn a total of 350.00 from holding Daito Trust Construction or generate 3.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daito Trust Construction vs. JD SPORTS FASH
Performance |
| Timeline |
| Daito Trust Construction |
| JD SPORTS FASH |
Daito Trust and JD SPORTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daito Trust and JD SPORTS
The main advantage of trading using opposite Daito Trust and JD SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daito Trust 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.| Daito Trust vs. COSTAR GROUP INC | Daito Trust vs. CBRE Group Class | Daito Trust vs. VONOVIA SE ADR | Daito Trust vs. Vonovia SE |
| JD SPORTS vs. FAST RETAIL ADR | JD SPORTS vs. AOYAMA TRADING | JD SPORTS vs. J JILL INC | JD SPORTS vs. Superior Plus Corp |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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