Correlation Between DAIDO METAL and JD SPORTS
Can any of the company-specific risk be diversified away by investing in both DAIDO METAL 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 DAIDO METAL and JD SPORTS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DAIDO METAL TD and JD SPORTS FASH, you can compare the effects of market volatilities on DAIDO METAL 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 DAIDO METAL with a short position of JD SPORTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAIDO METAL and JD SPORTS.
Diversification Opportunities for DAIDO METAL and JD SPORTS
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between DAIDO and 9JD is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding DAIDO METAL TD 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 DAIDO METAL 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 DAIDO METAL TD 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 DAIDO METAL i.e., DAIDO METAL and JD SPORTS go up and down completely randomly.
Pair Corralation between DAIDO METAL and JD SPORTS
Assuming the 90 days horizon DAIDO METAL TD is expected to generate 0.48 times more return on investment than JD SPORTS. However, DAIDO METAL TD is 2.07 times less risky than JD SPORTS. It trades about 0.15 of its potential returns per unit of risk. JD SPORTS FASH is currently generating about -0.1 per unit of risk. If you would invest 276.00 in DAIDO METAL TD on October 19, 2024 and sell it today you would earn a total of 14.00 from holding DAIDO METAL TD or generate 5.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAIDO METAL TD vs. JD SPORTS FASH
Performance |
| Timeline |
| DAIDO METAL TD |
| JD SPORTS FASH |
DAIDO METAL and JD SPORTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DAIDO METAL and JD SPORTS
The main advantage of trading using opposite DAIDO METAL and JD SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAIDO METAL 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.| DAIDO METAL vs. ecotel communication ag | DAIDO METAL vs. RETAIL FOOD GROUP | DAIDO METAL vs. Spirent Communications plc | DAIDO METAL vs. SPARTAN STORES |
| JD SPORTS vs. PARKEN Sport Entertainment | JD SPORTS vs. DAIDO METAL TD | JD SPORTS vs. ANTA SPORTS PRODUCT | JD SPORTS vs. Transport International Holdings |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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