Correlation Between JD SPORTS and Liberty Broadband
Can any of the company-specific risk be diversified away by investing in both JD SPORTS and Liberty Broadband 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 Liberty Broadband 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 Liberty Broadband, you can compare the effects of market volatilities on JD SPORTS and Liberty Broadband 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 Liberty Broadband. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD SPORTS and Liberty Broadband.
Diversification Opportunities for JD SPORTS and Liberty Broadband
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 9JD and Liberty is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding JD SPORTS FASH and Liberty Broadband in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Broadband 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 Liberty Broadband. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty Broadband has no effect on the direction of JD SPORTS i.e., JD SPORTS and Liberty Broadband go up and down completely randomly.
Pair Corralation between JD SPORTS and Liberty Broadband
Assuming the 90 days horizon JD SPORTS FASH is expected to under-perform the Liberty Broadband. In addition to that, JD SPORTS is 1.51 times more volatile than Liberty Broadband. It trades about -0.16 of its total potential returns per unit of risk. Liberty Broadband is currently generating about -0.04 per unit of volatility. If you would invest 7,350 in Liberty Broadband on October 11, 2024 and sell it today you would lose (100.00) from holding Liberty Broadband or give up 1.36% 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. Liberty Broadband
Performance |
| Timeline |
| JD SPORTS FASH |
| Liberty Broadband |
JD SPORTS and Liberty Broadband Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD SPORTS and Liberty Broadband
The main advantage of trading using opposite JD SPORTS and Liberty Broadband positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD SPORTS position performs unexpectedly, Liberty Broadband 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 Liberty Broadband will offset losses from the drop in Liberty Broadband's long position.| JD SPORTS vs. ALERION CLEANPOWER | JD SPORTS vs. ScanSource | JD SPORTS vs. Cleanaway Waste Management | JD SPORTS vs. Carnegie Clean Energy |
| Liberty Broadband vs. GREENX METALS LTD | Liberty Broadband vs. JD SPORTS FASH | Liberty Broadband vs. Charter Communications | Liberty Broadband vs. TELECOM ITALIA |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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