Correlation Between JD SPORTS and Accenture Plc
Can any of the company-specific risk be diversified away by investing in both JD SPORTS and Accenture Plc 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 Accenture Plc 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 Accenture plc, you can compare the effects of market volatilities on JD SPORTS and Accenture Plc 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 Accenture Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD SPORTS and Accenture Plc.
Diversification Opportunities for JD SPORTS and Accenture Plc
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 9JD and Accenture is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding JD SPORTS FASH and Accenture plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accenture plc 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 Accenture Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accenture plc has no effect on the direction of JD SPORTS i.e., JD SPORTS and Accenture Plc go up and down completely randomly.
Pair Corralation between JD SPORTS and Accenture Plc
Assuming the 90 days horizon JD SPORTS FASH is expected to under-perform the Accenture Plc. In addition to that, JD SPORTS is 1.96 times more volatile than Accenture plc. It trades about -0.01 of its total potential returns per unit of risk. Accenture plc is currently generating about 0.05 per unit of volatility. If you would invest 25,054 in Accenture plc on October 13, 2024 and sell it today you would earn a total of 9,681 from holding Accenture plc or generate 38.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD SPORTS FASH vs. Accenture plc
Performance |
| Timeline |
| JD SPORTS FASH |
| Accenture plc |
JD SPORTS and Accenture Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD SPORTS and Accenture Plc
The main advantage of trading using opposite JD SPORTS and Accenture Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD SPORTS position performs unexpectedly, Accenture Plc 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 Accenture Plc will offset losses from the drop in Accenture Plc's long position.| JD SPORTS vs. Titan Machinery | JD SPORTS vs. Federal Agricultural Mortgage | JD SPORTS vs. American Homes 4 | JD SPORTS vs. AGRICULTBK HADR25 YC |
| Accenture Plc vs. DAIDO METAL TD | Accenture Plc vs. PLAYMATES TOYS | Accenture Plc vs. RYU Apparel | Accenture Plc vs. JD SPORTS FASH |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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