Correlation Between JD SPORTS and Kaiser Aluminum
Can any of the company-specific risk be diversified away by investing in both JD SPORTS and Kaiser Aluminum 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 Kaiser Aluminum 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 Kaiser Aluminum, you can compare the effects of market volatilities on JD SPORTS and Kaiser Aluminum 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 Kaiser Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD SPORTS and Kaiser Aluminum.
Diversification Opportunities for JD SPORTS and Kaiser Aluminum
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 9JD and Kaiser is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding JD SPORTS FASH and Kaiser Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaiser Aluminum 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 Kaiser Aluminum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaiser Aluminum has no effect on the direction of JD SPORTS i.e., JD SPORTS and Kaiser Aluminum go up and down completely randomly.
Pair Corralation between JD SPORTS and Kaiser Aluminum
Assuming the 90 days horizon JD SPORTS FASH is expected to generate 0.94 times more return on investment than Kaiser Aluminum. However, JD SPORTS FASH is 1.07 times less risky than Kaiser Aluminum. It trades about -0.22 of its potential returns per unit of risk. Kaiser Aluminum is currently generating about -0.47 per unit of risk. If you would invest 121.00 in JD SPORTS FASH on September 27, 2024 and sell it today you would lose (8.00) from holding JD SPORTS FASH or give up 6.61% 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. Kaiser Aluminum
Performance |
| Timeline |
| JD SPORTS FASH |
| Kaiser Aluminum |
JD SPORTS and Kaiser Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD SPORTS and Kaiser Aluminum
The main advantage of trading using opposite JD SPORTS and Kaiser Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD SPORTS position performs unexpectedly, Kaiser Aluminum 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 Kaiser Aluminum will offset losses from the drop in Kaiser Aluminum's long position.| JD SPORTS vs. GFL ENVIRONM | JD SPORTS vs. TOWNSQUARE MEDIA INC | JD SPORTS vs. Monster Beverage Corp | JD SPORTS vs. Tencent Music Entertainment |
| Kaiser Aluminum vs. ARDAGH METAL PACDL 0001 | Kaiser Aluminum vs. JD SPORTS FASH | Kaiser Aluminum vs. InPlay Oil Corp | Kaiser Aluminum vs. DISTRICT METALS |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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