Correlation Between PKSHA TECHNOLOGY and JD SPORTS
Can any of the company-specific risk be diversified away by investing in both PKSHA TECHNOLOGY 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 PKSHA TECHNOLOGY and JD SPORTS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PKSHA TECHNOLOGY INC and JD SPORTS FASH, you can compare the effects of market volatilities on PKSHA TECHNOLOGY 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 PKSHA TECHNOLOGY with a short position of JD SPORTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of PKSHA TECHNOLOGY and JD SPORTS.
Diversification Opportunities for PKSHA TECHNOLOGY and JD SPORTS
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PKSHA and 9JD is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding PKSHA TECHNOLOGY INC 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 PKSHA TECHNOLOGY 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 PKSHA TECHNOLOGY INC 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 PKSHA TECHNOLOGY i.e., PKSHA TECHNOLOGY and JD SPORTS go up and down completely randomly.
Pair Corralation between PKSHA TECHNOLOGY and JD SPORTS
Assuming the 90 days horizon PKSHA TECHNOLOGY INC is expected to under-perform the JD SPORTS. But the stock apears to be less risky and, when comparing its historical volatility, PKSHA TECHNOLOGY INC is 1.23 times less risky than JD SPORTS. The stock trades about -0.14 of its potential returns per unit of risk. The JD SPORTS FASH is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 123.00 in JD SPORTS FASH on October 12, 2024 and sell it today you would lose (2.00) from holding JD SPORTS FASH or give up 1.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PKSHA TECHNOLOGY INC vs. JD SPORTS FASH
Performance |
| Timeline |
| PKSHA TECHNOLOGY INC |
| JD SPORTS FASH |
PKSHA TECHNOLOGY and JD SPORTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PKSHA TECHNOLOGY and JD SPORTS
The main advantage of trading using opposite PKSHA TECHNOLOGY and JD SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PKSHA TECHNOLOGY 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.| PKSHA TECHNOLOGY vs. Virtu Financial | PKSHA TECHNOLOGY vs. Synovus Financial Corp | PKSHA TECHNOLOGY vs. Air Lease | PKSHA TECHNOLOGY vs. Cincinnati Financial Corp |
| JD SPORTS vs. UPDATE SOFTWARE | JD SPORTS vs. PKSHA TECHNOLOGY INC | JD SPORTS vs. SENECA FOODS A | JD SPORTS vs. GWILLI FOOD |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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