Correlation Between XLMedia PLC and JD SPORTS
Can any of the company-specific risk be diversified away by investing in both XLMedia PLC 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 XLMedia PLC and JD SPORTS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XLMedia PLC and JD SPORTS FASH, you can compare the effects of market volatilities on XLMedia PLC 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 XLMedia PLC with a short position of JD SPORTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of XLMedia PLC and JD SPORTS.
Diversification Opportunities for XLMedia PLC and JD SPORTS
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between XLMedia and 9JD is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding XLMedia PLC 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 XLMedia PLC 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 XLMedia PLC 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 XLMedia PLC i.e., XLMedia PLC and JD SPORTS go up and down completely randomly.
Pair Corralation between XLMedia PLC and JD SPORTS
Assuming the 90 days horizon XLMedia PLC is expected to generate 2.13 times more return on investment than JD SPORTS. However, XLMedia PLC is 2.13 times more volatile than JD SPORTS FASH. It trades about 0.02 of its potential returns per unit of risk. JD SPORTS FASH is currently generating about 0.01 per unit of risk. If you would invest 17.00 in XLMedia PLC on September 4, 2024 and sell it today you would lose (3.00) from holding XLMedia PLC or give up 17.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
XLMedia PLC vs. JD SPORTS FASH
Performance |
| Timeline |
| XLMedia PLC |
| JD SPORTS FASH |
XLMedia PLC and JD SPORTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XLMedia PLC and JD SPORTS
The main advantage of trading using opposite XLMedia PLC and JD SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XLMedia PLC 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.| XLMedia PLC vs. Alphabet Class A | XLMedia PLC vs. Meta Platforms | XLMedia PLC vs. Meta Platforms | XLMedia PLC vs. Tencent Holdings |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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