Correlation Between JD SPORTS and Eagle Materials
Can any of the company-specific risk be diversified away by investing in both JD SPORTS and Eagle Materials 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 Eagle Materials 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 Eagle Materials, you can compare the effects of market volatilities on JD SPORTS and Eagle Materials 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 Eagle Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD SPORTS and Eagle Materials.
Diversification Opportunities for JD SPORTS and Eagle Materials
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 9JD and Eagle is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding JD SPORTS FASH and Eagle Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Materials 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 Eagle Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Materials has no effect on the direction of JD SPORTS i.e., JD SPORTS and Eagle Materials go up and down completely randomly.
Pair Corralation between JD SPORTS and Eagle Materials
Assuming the 90 days horizon JD SPORTS FASH is expected to under-perform the Eagle Materials. In addition to that, JD SPORTS is 2.17 times more volatile than Eagle Materials. It trades about -0.17 of its total potential returns per unit of risk. Eagle Materials is currently generating about 0.21 per unit of volatility. If you would invest 26,400 in Eagle Materials on September 5, 2024 and sell it today you would earn a total of 2,400 from holding Eagle Materials or generate 9.09% 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. Eagle Materials
Performance |
| Timeline |
| JD SPORTS FASH |
| Eagle Materials |
JD SPORTS and Eagle Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD SPORTS and Eagle Materials
The main advantage of trading using opposite JD SPORTS and Eagle Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD SPORTS position performs unexpectedly, Eagle Materials 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 Eagle Materials will offset losses from the drop in Eagle Materials' long position.| JD SPORTS vs. RYU Apparel | JD SPORTS vs. Titan Machinery | JD SPORTS vs. Granite Construction | JD SPORTS vs. AM EAGLE OUTFITTERS |
| Eagle Materials vs. JD SPORTS FASH | Eagle Materials vs. ECHO INVESTMENT ZY | Eagle Materials vs. SPORTING | Eagle Materials vs. HK Electric Investments |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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