Correlation Between JD SPORTS and ARROW ELECTRONICS
Can any of the company-specific risk be diversified away by investing in both JD SPORTS and ARROW ELECTRONICS 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 ARROW ELECTRONICS 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 ARROW ELECTRONICS, you can compare the effects of market volatilities on JD SPORTS and ARROW ELECTRONICS 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 ARROW ELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD SPORTS and ARROW ELECTRONICS.
Diversification Opportunities for JD SPORTS and ARROW ELECTRONICS
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 9JD and ARROW is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding JD SPORTS FASH and ARROW ELECTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARROW ELECTRONICS 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 ARROW ELECTRONICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARROW ELECTRONICS has no effect on the direction of JD SPORTS i.e., JD SPORTS and ARROW ELECTRONICS go up and down completely randomly.
Pair Corralation between JD SPORTS and ARROW ELECTRONICS
Assuming the 90 days horizon JD SPORTS FASH is expected to generate 1.68 times more return on investment than ARROW ELECTRONICS. However, JD SPORTS is 1.68 times more volatile than ARROW ELECTRONICS. It trades about -0.04 of its potential returns per unit of risk. ARROW ELECTRONICS is currently generating about -0.28 per unit of risk. If you would invest 123.00 in JD SPORTS FASH on October 12, 2024 and sell it today you would lose (2.00) from holding JD SPORTS FASH or give up 1.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
JD SPORTS FASH vs. ARROW ELECTRONICS
Performance |
| Timeline |
| JD SPORTS FASH |
| ARROW ELECTRONICS |
JD SPORTS and ARROW ELECTRONICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD SPORTS and ARROW ELECTRONICS
The main advantage of trading using opposite JD SPORTS and ARROW ELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD SPORTS position performs unexpectedly, ARROW ELECTRONICS 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 ARROW ELECTRONICS will offset losses from the drop in ARROW ELECTRONICS's long position.| JD SPORTS vs. UPDATE SOFTWARE | JD SPORTS vs. PKSHA TECHNOLOGY INC | JD SPORTS vs. SENECA FOODS A | JD SPORTS vs. GWILLI FOOD |
| ARROW ELECTRONICS vs. Pembina Pipeline Corp | ARROW ELECTRONICS vs. SOEDER SPORTFISKE AB | ARROW ELECTRONICS vs. JD SPORTS FASH | ARROW ELECTRONICS vs. Boyd Gaming |
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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