Correlation Between JD SPORTS and CME
Can any of the company-specific risk be diversified away by investing in both JD SPORTS and CME 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 CME 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 CME Group, you can compare the effects of market volatilities on JD SPORTS and CME 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 CME. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD SPORTS and CME.
Diversification Opportunities for JD SPORTS and CME
Pay attention - limited upside
The 3 months correlation between 9JD and CME is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding JD SPORTS FASH and CME Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CME Group 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 CME. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CME Group has no effect on the direction of JD SPORTS i.e., JD SPORTS and CME go up and down completely randomly.
Pair Corralation between JD SPORTS and CME
Assuming the 90 days horizon JD SPORTS FASH is expected to under-perform the CME. In addition to that, JD SPORTS is 3.46 times more volatile than CME Group. It trades about -0.12 of its total potential returns per unit of risk. CME Group is currently generating about 0.22 per unit of volatility. If you would invest 21,477 in CME Group on September 14, 2024 and sell it today you would earn a total of 1,223 from holding CME Group or generate 5.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD SPORTS FASH vs. CME Group
Performance |
| Timeline |
| JD SPORTS FASH |
| CME Group |
JD SPORTS and CME Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD SPORTS and CME
The main advantage of trading using opposite JD SPORTS and CME positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD SPORTS position performs unexpectedly, CME 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 CME will offset losses from the drop in CME'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 |
| CME vs. Playa Hotels Resorts | CME vs. JD SPORTS FASH | CME vs. PLAYSTUDIOS A DL 0001 | CME vs. ANTA SPORTS PRODUCT |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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