Correlation Between JD SPORTS and Science Applications
Can any of the company-specific risk be diversified away by investing in both JD SPORTS and Science Applications 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 Science Applications 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 Science Applications International, you can compare the effects of market volatilities on JD SPORTS and Science Applications 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 Science Applications. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD SPORTS and Science Applications.
Diversification Opportunities for JD SPORTS and Science Applications
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 9JD and Science is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding JD SPORTS FASH and Science Applications Internati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Science Applications 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 Science Applications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Science Applications has no effect on the direction of JD SPORTS i.e., JD SPORTS and Science Applications go up and down completely randomly.
Pair Corralation between JD SPORTS and Science Applications
Assuming the 90 days horizon JD SPORTS FASH is expected to generate 1.03 times more return on investment than Science Applications. However, JD SPORTS is 1.03 times more volatile than Science Applications International. It trades about -0.12 of its potential returns per unit of risk. Science Applications International is currently generating about -0.3 per unit of risk. If you would invest 139.00 in JD SPORTS FASH on September 14, 2024 and sell it today you would lose (16.00) from holding JD SPORTS FASH or give up 11.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD SPORTS FASH vs. Science Applications Internati
Performance |
| Timeline |
| JD SPORTS FASH |
| Science Applications |
JD SPORTS and Science Applications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD SPORTS and Science Applications
The main advantage of trading using opposite JD SPORTS and Science Applications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD SPORTS position performs unexpectedly, Science Applications 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 Science Applications will offset losses from the drop in Science Applications' long position.| JD SPORTS vs. FAST RETAIL ADR | JD SPORTS vs. CCC SA | JD SPORTS vs. AOYAMA TRADING | JD SPORTS vs. Superior Plus Corp |
| Science Applications vs. PSI Software AG | Science Applications vs. Universal Display | Science Applications vs. JD SPORTS FASH | Science Applications vs. Constellation Software |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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