Correlation Between JD SPORTS and ELEMENT FLEET
Can any of the company-specific risk be diversified away by investing in both JD SPORTS and ELEMENT FLEET 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 ELEMENT FLEET 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 ELEMENT FLEET MGMT, you can compare the effects of market volatilities on JD SPORTS and ELEMENT FLEET 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 ELEMENT FLEET. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD SPORTS and ELEMENT FLEET.
Diversification Opportunities for JD SPORTS and ELEMENT FLEET
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 9JD and ELEMENT is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding JD SPORTS FASH and ELEMENT FLEET MGMT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELEMENT FLEET MGMT 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 ELEMENT FLEET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ELEMENT FLEET MGMT has no effect on the direction of JD SPORTS i.e., JD SPORTS and ELEMENT FLEET go up and down completely randomly.
Pair Corralation between JD SPORTS and ELEMENT FLEET
Assuming the 90 days horizon JD SPORTS FASH is expected to under-perform the ELEMENT FLEET. In addition to that, JD SPORTS is 1.3 times more volatile than ELEMENT FLEET MGMT. It trades about -0.03 of its total potential returns per unit of risk. ELEMENT FLEET MGMT is currently generating about 0.07 per unit of volatility. If you would invest 1,607 in ELEMENT FLEET MGMT on September 5, 2024 and sell it today you would earn a total of 343.00 from holding ELEMENT FLEET MGMT or generate 21.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD SPORTS FASH vs. ELEMENT FLEET MGMT
Performance |
| Timeline |
| JD SPORTS FASH |
| ELEMENT FLEET MGMT |
JD SPORTS and ELEMENT FLEET Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD SPORTS and ELEMENT FLEET
The main advantage of trading using opposite JD SPORTS and ELEMENT FLEET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD SPORTS position performs unexpectedly, ELEMENT FLEET 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 ELEMENT FLEET will offset losses from the drop in ELEMENT FLEET's long position.| JD SPORTS vs. RYU Apparel | JD SPORTS vs. Titan Machinery | JD SPORTS vs. Granite Construction | JD SPORTS vs. AM EAGLE OUTFITTERS |
| ELEMENT FLEET vs. JD SPORTS FASH | ELEMENT FLEET vs. Live Nation Entertainment | ELEMENT FLEET vs. FUTURE GAMING GRP | ELEMENT FLEET vs. Tencent Music Entertainment |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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