Correlation Between JD SPORTS and ENDESA ADR
Can any of the company-specific risk be diversified away by investing in both JD SPORTS and ENDESA ADR 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 ENDESA ADR 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 ENDESA ADR 12, you can compare the effects of market volatilities on JD SPORTS and ENDESA ADR 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 ENDESA ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD SPORTS and ENDESA ADR.
Diversification Opportunities for JD SPORTS and ENDESA ADR
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 9JD and ENDESA is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding JD SPORTS FASH and ENDESA ADR 12 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENDESA ADR 12 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 ENDESA ADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENDESA ADR 12 has no effect on the direction of JD SPORTS i.e., JD SPORTS and ENDESA ADR go up and down completely randomly.
Pair Corralation between JD SPORTS and ENDESA ADR
Assuming the 90 days horizon JD SPORTS FASH is expected to under-perform the ENDESA ADR. In addition to that, JD SPORTS is 2.51 times more volatile than ENDESA ADR 12. It trades about -0.12 of its total potential returns per unit of risk. ENDESA ADR 12 is currently generating about 0.08 per unit of volatility. If you would invest 940.00 in ENDESA ADR 12 on September 12, 2024 and sell it today you would earn a total of 55.00 from holding ENDESA ADR 12 or generate 5.85% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 98.46% |
Values | Daily Returns |
JD SPORTS FASH vs. ENDESA ADR 12
Performance |
Timeline |
JD SPORTS FASH |
ENDESA ADR 12 |
JD SPORTS and ENDESA ADR Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with JD SPORTS and ENDESA ADR
The main advantage of trading using opposite JD SPORTS and ENDESA ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD SPORTS position performs unexpectedly, ENDESA ADR 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 ENDESA ADR will offset losses from the drop in ENDESA ADR's long position.JD SPORTS vs. FAST RETAIL ADR | JD SPORTS vs. CCC SA | JD SPORTS vs. AOYAMA TRADING | JD SPORTS vs. Superior Plus Corp |
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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