Correlation Between JD SPORTS and SIMS METAL
Can any of the company-specific risk be diversified away by investing in both JD SPORTS and SIMS METAL 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 SIMS METAL 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 SIMS METAL MGT, you can compare the effects of market volatilities on JD SPORTS and SIMS METAL 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 SIMS METAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD SPORTS and SIMS METAL.
Diversification Opportunities for JD SPORTS and SIMS METAL
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 9JD and SIMS is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding JD SPORTS FASH and SIMS METAL MGT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIMS METAL MGT 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 SIMS METAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIMS METAL MGT has no effect on the direction of JD SPORTS i.e., JD SPORTS and SIMS METAL go up and down completely randomly.
Pair Corralation between JD SPORTS and SIMS METAL
Assuming the 90 days horizon JD SPORTS FASH is expected to under-perform the SIMS METAL. In addition to that, JD SPORTS is 1.37 times more volatile than SIMS METAL MGT. It trades about -0.31 of its total potential returns per unit of risk. SIMS METAL MGT is currently generating about 0.08 per unit of volatility. If you would invest 720.00 in SIMS METAL MGT on August 25, 2024 and sell it today you would earn a total of 50.00 from holding SIMS METAL MGT or generate 6.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD SPORTS FASH vs. SIMS METAL MGT
Performance |
| Timeline |
| JD SPORTS FASH |
| SIMS METAL MGT |
JD SPORTS and SIMS METAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD SPORTS and SIMS METAL
The main advantage of trading using opposite JD SPORTS and SIMS METAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD SPORTS position performs unexpectedly, SIMS METAL 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 SIMS METAL will offset losses from the drop in SIMS METAL's long position.| JD SPORTS vs. FAST RETAIL ADR | JD SPORTS vs. AOYAMA TRADING | JD SPORTS vs. J JILL INC | JD SPORTS vs. Superior Plus Corp |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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