Correlation Between JD SPORTS and ALGOMA STEEL
Can any of the company-specific risk be diversified away by investing in both JD SPORTS and ALGOMA STEEL 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 ALGOMA STEEL 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 ALGOMA STEEL GROUP, you can compare the effects of market volatilities on JD SPORTS and ALGOMA STEEL 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 ALGOMA STEEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD SPORTS and ALGOMA STEEL.
Diversification Opportunities for JD SPORTS and ALGOMA STEEL
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 9JD and ALGOMA is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding JD SPORTS FASH and ALGOMA STEEL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALGOMA STEEL GROUP 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 ALGOMA STEEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALGOMA STEEL GROUP has no effect on the direction of JD SPORTS i.e., JD SPORTS and ALGOMA STEEL go up and down completely randomly.
Pair Corralation between JD SPORTS and ALGOMA STEEL
Assuming the 90 days horizon JD SPORTS FASH is expected to under-perform the ALGOMA STEEL. In addition to that, JD SPORTS is 2.62 times more volatile than ALGOMA STEEL GROUP. It trades about -0.12 of its total potential returns per unit of risk. ALGOMA STEEL GROUP is currently generating about -0.26 per unit of volatility. If you would invest 1,045 in ALGOMA STEEL GROUP on September 14, 2024 and sell it today you would lose (90.00) from holding ALGOMA STEEL GROUP or give up 8.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD SPORTS FASH vs. ALGOMA STEEL GROUP
Performance |
| Timeline |
| JD SPORTS FASH |
| ALGOMA STEEL GROUP |
JD SPORTS and ALGOMA STEEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD SPORTS and ALGOMA STEEL
The main advantage of trading using opposite JD SPORTS and ALGOMA STEEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD SPORTS position performs unexpectedly, ALGOMA STEEL 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 ALGOMA STEEL will offset losses from the drop in ALGOMA STEEL'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 |
| ALGOMA STEEL vs. ArcelorMittal | ALGOMA STEEL vs. NIPPON STEEL SPADR | ALGOMA STEEL vs. Reliance Steel Aluminum | ALGOMA STEEL vs. Superior Plus Corp |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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