Correlation Between JD SPORTS and HubSpot

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Can any of the company-specific risk be diversified away by investing in both JD SPORTS and HubSpot 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 JD SPORTS and HubSpot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JD SPORTS FASH and HubSpot, you can compare the effects of market volatilities on JD SPORTS and HubSpot 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 JD SPORTS with a short position of HubSpot. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD SPORTS and HubSpot.

Diversification Opportunities for JD SPORTS and HubSpot

-0.85
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between 9JD and HubSpot is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding JD SPORTS FASH and HubSpot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HubSpot and JD SPORTS 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 JD SPORTS FASH are associated (or correlated) with HubSpot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HubSpot has no effect on the direction of JD SPORTS i.e., JD SPORTS and HubSpot go up and down completely randomly.

Pair Corralation between JD SPORTS and HubSpot

Assuming the 90 days horizon JD SPORTS FASH is expected to under-perform the HubSpot. In addition to that, JD SPORTS is 1.11 times more volatile than HubSpot. It trades about 0.0 of its total potential returns per unit of risk. HubSpot is currently generating about 0.06 per unit of volatility. If you would invest  55,500  in HubSpot on September 3, 2024 and sell it today you would earn a total of  12,580  from holding HubSpot or generate 22.67% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

JD SPORTS FASH  vs.  HubSpot

 Performance 
       Timeline  
JD SPORTS FASH 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days JD SPORTS FASH has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
HubSpot 

Risk-Adjusted Performance

22 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in HubSpot are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, HubSpot reported solid returns over the last few months and may actually be approaching a breakup point.

JD SPORTS and HubSpot Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with JD SPORTS and HubSpot

The main advantage of trading using opposite JD SPORTS and HubSpot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD SPORTS position performs unexpectedly, HubSpot 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 HubSpot will offset losses from the drop in HubSpot's long position.
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The idea behind JD SPORTS FASH and HubSpot pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.

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