Correlation Between 88 Energy and JD Sports
Can any of the company-specific risk be diversified away by investing in both 88 Energy 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 88 Energy and JD Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 88 Energy and JD Sports Fashion, you can compare the effects of market volatilities on 88 Energy 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 88 Energy with a short position of JD Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of 88 Energy and JD Sports.
Diversification Opportunities for 88 Energy and JD Sports
Weak diversification
The 3 months correlation between 88E and JD Sports is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding 88 Energy and JD Sports Fashion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JD Sports Fashion and 88 Energy 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 88 Energy 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 Fashion has no effect on the direction of 88 Energy i.e., 88 Energy and JD Sports go up and down completely randomly.
Pair Corralation between 88 Energy and JD Sports
Assuming the 90 days trading horizon 88 Energy is expected to under-perform the JD Sports. In addition to that, 88 Energy is 1.86 times more volatile than JD Sports Fashion. It trades about -0.06 of its total potential returns per unit of risk. JD Sports Fashion is currently generating about -0.02 per unit of volatility. If you would invest 12,632 in JD Sports Fashion on August 26, 2024 and sell it today you would lose (3,286) from holding JD Sports Fashion or give up 26.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
88 Energy vs. JD Sports Fashion
Performance |
| Timeline |
| 88 Energy |
| JD Sports Fashion |
88 Energy and JD Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 88 Energy and JD Sports
The main advantage of trading using opposite 88 Energy and JD Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 88 Energy 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' long position.| 88 Energy vs. Tata Steel Limited | 88 Energy vs. Elmos Semiconductor SE | 88 Energy vs. Samsung Electronics Co | 88 Energy vs. Impax Environmental Markets |
| JD Sports vs. Lloyds Banking Group | JD Sports vs. Premier African Minerals | JD Sports vs. SANTANDER UK 8 | JD Sports vs. 88 Energy |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |