Correlation Between Superior Plus and JD SPORTS
Can any of the company-specific risk be diversified away by investing in both Superior Plus 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 Superior Plus and JD SPORTS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Superior Plus Corp and JD SPORTS FASH, you can compare the effects of market volatilities on Superior Plus 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 Superior Plus with a short position of JD SPORTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and JD SPORTS.
Diversification Opportunities for Superior Plus and JD SPORTS
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Superior and 9JD is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp 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 Superior Plus 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 Superior Plus Corp 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 Superior Plus i.e., Superior Plus and JD SPORTS go up and down completely randomly.
Pair Corralation between Superior Plus and JD SPORTS
Assuming the 90 days horizon Superior Plus Corp is expected to generate 1.34 times more return on investment than JD SPORTS. However, Superior Plus is 1.34 times more volatile than JD SPORTS FASH. It trades about -0.01 of its potential returns per unit of risk. JD SPORTS FASH is currently generating about -0.37 per unit of risk. If you would invest 428.00 in Superior Plus Corp on August 28, 2024 and sell it today you would lose (18.00) from holding Superior Plus Corp or give up 4.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Plus Corp vs. JD SPORTS FASH
Performance |
| Timeline |
| Superior Plus Corp |
| JD SPORTS FASH |
Superior Plus and JD SPORTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and JD SPORTS
The main advantage of trading using opposite Superior Plus and JD SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus 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.| Superior Plus vs. Canon Marketing Japan | Superior Plus vs. CANON MARKETING JP | Superior Plus vs. KRISPY KREME DL 01 | Superior Plus vs. SIDETRADE EO 1 |
| JD SPORTS vs. Hochschild Mining plc | JD SPORTS vs. Scientific Games | JD SPORTS vs. QINGCI GAMES INC | JD SPORTS vs. FUTURE GAMING GRP |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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