Correlation Between JD SPORTS and PLAYMATES TOYS
Can any of the company-specific risk be diversified away by investing in both JD SPORTS and PLAYMATES TOYS 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 PLAYMATES TOYS 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 PLAYMATES TOYS, you can compare the effects of market volatilities on JD SPORTS and PLAYMATES TOYS 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 PLAYMATES TOYS. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD SPORTS and PLAYMATES TOYS.
Diversification Opportunities for JD SPORTS and PLAYMATES TOYS
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between 9JD and PLAYMATES is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding JD SPORTS FASH and PLAYMATES TOYS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYMATES TOYS 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 PLAYMATES TOYS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAYMATES TOYS has no effect on the direction of JD SPORTS i.e., JD SPORTS and PLAYMATES TOYS go up and down completely randomly.
Pair Corralation between JD SPORTS and PLAYMATES TOYS
Assuming the 90 days horizon JD SPORTS FASH is expected to under-perform the PLAYMATES TOYS. In addition to that, JD SPORTS is 1.46 times more volatile than PLAYMATES TOYS. It trades about -0.12 of its total potential returns per unit of risk. PLAYMATES TOYS is currently generating about -0.06 per unit of volatility. If you would invest 6.90 in PLAYMATES TOYS on September 14, 2024 and sell it today you would lose (0.30) from holding PLAYMATES TOYS or give up 4.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD SPORTS FASH vs. PLAYMATES TOYS
Performance |
| Timeline |
| JD SPORTS FASH |
| PLAYMATES TOYS |
JD SPORTS and PLAYMATES TOYS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD SPORTS and PLAYMATES TOYS
The main advantage of trading using opposite JD SPORTS and PLAYMATES TOYS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD SPORTS position performs unexpectedly, PLAYMATES TOYS 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 PLAYMATES TOYS will offset losses from the drop in PLAYMATES TOYS's long position.| JD SPORTS vs. FAST RETAIL ADR | JD SPORTS vs. CCC SA | JD SPORTS vs. AOYAMA TRADING | JD SPORTS vs. Superior Plus Corp |
| PLAYMATES TOYS vs. GALENA MINING LTD | PLAYMATES TOYS vs. LION ONE METALS | PLAYMATES TOYS vs. ASSOC BR FOODS | PLAYMATES TOYS vs. TYSON FOODS A |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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