Correlation Between JD SPORTS and Ebro Foods
Can any of the company-specific risk be diversified away by investing in both JD SPORTS and Ebro Foods 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 Ebro Foods 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 Ebro Foods SA, you can compare the effects of market volatilities on JD SPORTS and Ebro Foods 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 Ebro Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD SPORTS and Ebro Foods.
Diversification Opportunities for JD SPORTS and Ebro Foods
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 9JD and Ebro is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding JD SPORTS FASH and Ebro Foods SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ebro Foods SA 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 Ebro Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ebro Foods SA has no effect on the direction of JD SPORTS i.e., JD SPORTS and Ebro Foods go up and down completely randomly.
Pair Corralation between JD SPORTS and Ebro Foods
Assuming the 90 days horizon JD SPORTS FASH is expected to under-perform the Ebro Foods. In addition to that, JD SPORTS is 1.98 times more volatile than Ebro Foods SA. It trades about -0.33 of its total potential returns per unit of risk. Ebro Foods SA is currently generating about -0.07 per unit of volatility. If you would invest 1,606 in Ebro Foods SA on August 24, 2024 and sell it today you would lose (26.00) from holding Ebro Foods SA or give up 1.62% 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. Ebro Foods SA
Performance |
| Timeline |
| JD SPORTS FASH |
| Ebro Foods SA |
JD SPORTS and Ebro Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD SPORTS and Ebro Foods
The main advantage of trading using opposite JD SPORTS and Ebro Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD SPORTS position performs unexpectedly, Ebro Foods 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 Ebro Foods will offset losses from the drop in Ebro Foods' long position.| JD SPORTS vs. AOYAMA TRADING | JD SPORTS vs. Origin Agritech | JD SPORTS vs. SIVERS SEMICONDUCTORS AB | JD SPORTS vs. Talanx AG |
| Ebro Foods vs. Origin Agritech | Ebro Foods vs. SIVERS SEMICONDUCTORS AB | Ebro Foods vs. Talanx AG | Ebro Foods vs. INTUITIVE SURGICAL |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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