Correlation Between JD SPORTS and Japan Asia
Can any of the company-specific risk be diversified away by investing in both JD SPORTS and Japan Asia 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 Japan Asia 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 Japan Asia Investment, you can compare the effects of market volatilities on JD SPORTS and Japan Asia 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 Japan Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD SPORTS and Japan Asia.
Diversification Opportunities for JD SPORTS and Japan Asia
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 9JD and Japan is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding JD SPORTS FASH and Japan Asia Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Asia Investment 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 Japan Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Asia Investment has no effect on the direction of JD SPORTS i.e., JD SPORTS and Japan Asia go up and down completely randomly.
Pair Corralation between JD SPORTS and Japan Asia
Assuming the 90 days horizon JD SPORTS FASH is expected to under-perform the Japan Asia. But the stock apears to be less risky and, when comparing its historical volatility, JD SPORTS FASH is 1.03 times less risky than Japan Asia. The stock trades about -0.02 of its potential returns per unit of risk. The Japan Asia Investment is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 159.00 in Japan Asia Investment on October 16, 2024 and sell it today you would lose (33.00) from holding Japan Asia Investment or give up 20.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD SPORTS FASH vs. Japan Asia Investment
Performance |
| Timeline |
| JD SPORTS FASH |
| Japan Asia Investment |
JD SPORTS and Japan Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD SPORTS and Japan Asia
The main advantage of trading using opposite JD SPORTS and Japan Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD SPORTS position performs unexpectedly, Japan Asia 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 Japan Asia will offset losses from the drop in Japan Asia's long position.| JD SPORTS vs. Liberty Broadband | JD SPORTS vs. CanSino Biologics | JD SPORTS vs. ScanSource | JD SPORTS vs. NAGOYA RAILROAD |
| Japan Asia vs. United Insurance Holdings | Japan Asia vs. COLUMBIA SPORTSWEAR | Japan Asia vs. Playtech plc | Japan Asia vs. JD SPORTS FASH |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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