Correlation Between JD SPORTS and LOANDEPOT INC
Can any of the company-specific risk be diversified away by investing in both JD SPORTS and LOANDEPOT INC 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 LOANDEPOT INC 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 LOANDEPOT INC A, you can compare the effects of market volatilities on JD SPORTS and LOANDEPOT INC 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 LOANDEPOT INC. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD SPORTS and LOANDEPOT INC.
Diversification Opportunities for JD SPORTS and LOANDEPOT INC
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 9JD and LOANDEPOT is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding JD SPORTS FASH and LOANDEPOT INC A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOANDEPOT INC A 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 LOANDEPOT INC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOANDEPOT INC A has no effect on the direction of JD SPORTS i.e., JD SPORTS and LOANDEPOT INC go up and down completely randomly.
Pair Corralation between JD SPORTS and LOANDEPOT INC
Assuming the 90 days horizon JD SPORTS FASH is expected to under-perform the LOANDEPOT INC. But the stock apears to be less risky and, when comparing its historical volatility, JD SPORTS FASH is 1.56 times less risky than LOANDEPOT INC. The stock trades about -0.01 of its potential returns per unit of risk. The LOANDEPOT INC A is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 154.00 in LOANDEPOT INC A on September 14, 2024 and sell it today you would earn a total of 48.00 from holding LOANDEPOT INC A or generate 31.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD SPORTS FASH vs. LOANDEPOT INC A
Performance |
| Timeline |
| JD SPORTS FASH |
| LOANDEPOT INC A |
JD SPORTS and LOANDEPOT INC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD SPORTS and LOANDEPOT INC
The main advantage of trading using opposite JD SPORTS and LOANDEPOT INC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD SPORTS position performs unexpectedly, LOANDEPOT INC 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 LOANDEPOT INC will offset losses from the drop in LOANDEPOT INC's long position.| JD SPORTS vs. FAST RETAIL ADR | JD SPORTS vs. CCC SA | JD SPORTS vs. AOYAMA TRADING | JD SPORTS vs. Superior Plus Corp |
| LOANDEPOT INC vs. CPU SOFTWAREHOUSE | LOANDEPOT INC vs. VITEC SOFTWARE GROUP | LOANDEPOT INC vs. AXWAY SOFTWARE EO | LOANDEPOT INC 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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