Correlation Between JD SPORTS and DICKS Sporting
Can any of the company-specific risk be diversified away by investing in both JD SPORTS and DICKS Sporting 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 DICKS Sporting 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 DICKS Sporting Goods, you can compare the effects of market volatilities on JD SPORTS and DICKS Sporting 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 DICKS Sporting. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD SPORTS and DICKS Sporting.
Diversification Opportunities for JD SPORTS and DICKS Sporting
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 9JD and DICKS is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding JD SPORTS FASH and DICKS Sporting Goods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DICKS Sporting Goods 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 DICKS Sporting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DICKS Sporting Goods has no effect on the direction of JD SPORTS i.e., JD SPORTS and DICKS Sporting go up and down completely randomly.
Pair Corralation between JD SPORTS and DICKS Sporting
Assuming the 90 days horizon JD SPORTS FASH is expected to under-perform the DICKS Sporting. In addition to that, JD SPORTS is 1.18 times more volatile than DICKS Sporting Goods. It trades about -0.03 of its total potential returns per unit of risk. DICKS Sporting Goods is currently generating about 0.05 per unit of volatility. If you would invest 13,129 in DICKS Sporting Goods on December 4, 2024 and sell it today you would earn a total of 7,956 from holding DICKS Sporting Goods or generate 60.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD SPORTS FASH vs. DICKS Sporting Goods
Performance |
| Timeline |
| JD SPORTS FASH |
| DICKS Sporting Goods |
JD SPORTS and DICKS Sporting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD SPORTS and DICKS Sporting
The main advantage of trading using opposite JD SPORTS and DICKS Sporting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD SPORTS position performs unexpectedly, DICKS Sporting 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 DICKS Sporting will offset losses from the drop in DICKS Sporting's long position.| JD SPORTS vs. CyberArk Software | JD SPORTS vs. Discover Financial Services | JD SPORTS vs. VITEC SOFTWARE GROUP | JD SPORTS vs. UNIQA INSURANCE GR |
| DICKS Sporting vs. KOBE STEEL LTD | DICKS Sporting vs. Gaming and Leisure | DICKS Sporting vs. GUILD ESPORTS PLC | DICKS Sporting vs. MAANSHAN IRON H |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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