Correlation Between JD SPORTS and GOODYEAR T
Can any of the company-specific risk be diversified away by investing in both JD SPORTS and GOODYEAR T 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 GOODYEAR T 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 GOODYEAR T RUBBER, you can compare the effects of market volatilities on JD SPORTS and GOODYEAR T 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 GOODYEAR T. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD SPORTS and GOODYEAR T.
Diversification Opportunities for JD SPORTS and GOODYEAR T
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 9JD and GOODYEAR is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding JD SPORTS FASH and GOODYEAR T RUBBER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOODYEAR T RUBBER 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 GOODYEAR T. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOODYEAR T RUBBER has no effect on the direction of JD SPORTS i.e., JD SPORTS and GOODYEAR T go up and down completely randomly.
Pair Corralation between JD SPORTS and GOODYEAR T
Assuming the 90 days horizon JD SPORTS is expected to generate 1.42 times less return on investment than GOODYEAR T. In addition to that, JD SPORTS is 1.12 times more volatile than GOODYEAR T RUBBER. It trades about 0.01 of its total potential returns per unit of risk. GOODYEAR T RUBBER is currently generating about 0.01 per unit of volatility. If you would invest 1,027 in GOODYEAR T RUBBER on September 3, 2024 and sell it today you would lose (13.00) from holding GOODYEAR T RUBBER or give up 1.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD SPORTS FASH vs. GOODYEAR T RUBBER
Performance |
| Timeline |
| JD SPORTS FASH |
| GOODYEAR T RUBBER |
JD SPORTS and GOODYEAR T Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD SPORTS and GOODYEAR T
The main advantage of trading using opposite JD SPORTS and GOODYEAR T positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD SPORTS position performs unexpectedly, GOODYEAR T 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 GOODYEAR T will offset losses from the drop in GOODYEAR T's long position.| JD SPORTS vs. FAST RETAILCOSPHDR 1 | JD SPORTS vs. FAST RETAIL ADR | JD SPORTS vs. Ross Stores | JD SPORTS vs. Designer Brands |
| GOODYEAR T vs. TOTAL GABON | GOODYEAR T vs. Walgreens Boots Alliance | GOODYEAR T vs. Peak Resources Limited |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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