Correlation Between JD SPORTS and Easy Software
Can any of the company-specific risk be diversified away by investing in both JD SPORTS and Easy Software 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 Easy Software 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 Easy Software AG, you can compare the effects of market volatilities on JD SPORTS and Easy Software 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 Easy Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD SPORTS and Easy Software.
Diversification Opportunities for JD SPORTS and Easy Software
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 9JD and Easy is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding JD SPORTS FASH and Easy Software AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Easy Software AG 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 Easy Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Easy Software AG has no effect on the direction of JD SPORTS i.e., JD SPORTS and Easy Software go up and down completely randomly.
Pair Corralation between JD SPORTS and Easy Software
Assuming the 90 days horizon JD SPORTS FASH is expected to under-perform the Easy Software. In addition to that, JD SPORTS is 1.19 times more volatile than Easy Software AG. It trades about -0.03 of its total potential returns per unit of risk. Easy Software AG is currently generating about 0.03 per unit of volatility. If you would invest 1,427 in Easy Software AG on November 1, 2024 and sell it today you would earn a total of 323.00 from holding Easy Software AG or generate 22.63% 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. Easy Software AG
Performance |
| Timeline |
| JD SPORTS FASH |
| Easy Software AG |
JD SPORTS and Easy Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD SPORTS and Easy Software
The main advantage of trading using opposite JD SPORTS and Easy Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD SPORTS position performs unexpectedly, Easy Software 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 Easy Software will offset losses from the drop in Easy Software's long position.| JD SPORTS vs. FAST RETAIL ADR | JD SPORTS vs. Ross Stores | JD SPORTS vs. Genesco | JD SPORTS vs. AOYAMA TRADING |
| Easy Software vs. ePlay Digital | Easy Software vs. PLAY2CHILL SA ZY | Easy Software vs. UNIQA INSURANCE GR | Easy Software vs. PLAYTIKA HOLDING DL 01 |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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