Correlation Between JD SPORTS and American Airlines
Can any of the company-specific risk be diversified away by investing in both JD SPORTS and American Airlines 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 American Airlines 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 American Airlines Group, you can compare the effects of market volatilities on JD SPORTS and American Airlines 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 American Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD SPORTS and American Airlines.
Diversification Opportunities for JD SPORTS and American Airlines
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 9JD and American is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding JD SPORTS FASH and American Airlines Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Airlines 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 American Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Airlines has no effect on the direction of JD SPORTS i.e., JD SPORTS and American Airlines go up and down completely randomly.
Pair Corralation between JD SPORTS and American Airlines
Assuming the 90 days horizon JD SPORTS is expected to generate 10.71 times less return on investment than American Airlines. In addition to that, JD SPORTS is 1.18 times more volatile than American Airlines Group. It trades about 0.0 of its total potential returns per unit of risk. American Airlines Group is currently generating about 0.04 per unit of volatility. If you would invest 1,205 in American Airlines Group on September 24, 2024 and sell it today you would earn a total of 425.00 from holding American Airlines Group or generate 35.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD SPORTS FASH vs. American Airlines Group
Performance |
| Timeline |
| JD SPORTS FASH |
| American Airlines |
JD SPORTS and American Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD SPORTS and American Airlines
The main advantage of trading using opposite JD SPORTS and American Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD SPORTS position performs unexpectedly, American Airlines 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 American Airlines will offset losses from the drop in American Airlines' long position.| JD SPORTS vs. Regal Hotels International | JD SPORTS vs. DALATA HOTEL | JD SPORTS vs. InterContinental Hotels Group | JD SPORTS vs. Park Hotels Resorts |
| American Airlines vs. JD SPORTS FASH | American Airlines vs. Gaztransport Technigaz SA | American Airlines vs. SIEM OFFSHORE NEW | American Airlines vs. CarsalesCom |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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