Correlation Between JD SPORTS and Natural Health
Can any of the company-specific risk be diversified away by investing in both JD SPORTS and Natural Health 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 Natural Health 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 Natural Health Trends, you can compare the effects of market volatilities on JD SPORTS and Natural Health 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 Natural Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD SPORTS and Natural Health.
Diversification Opportunities for JD SPORTS and Natural Health
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between 9JD and Natural is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding JD SPORTS FASH and Natural Health Trends in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natural Health Trends 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 Natural Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natural Health Trends has no effect on the direction of JD SPORTS i.e., JD SPORTS and Natural Health go up and down completely randomly.
Pair Corralation between JD SPORTS and Natural Health
Assuming the 90 days horizon JD SPORTS FASH is expected to under-perform the Natural Health. In addition to that, JD SPORTS is 1.46 times more volatile than Natural Health Trends. It trades about -0.17 of its total potential returns per unit of risk. Natural Health Trends is currently generating about -0.01 per unit of volatility. If you would invest 517.00 in Natural Health Trends on September 5, 2024 and sell it today you would lose (7.00) from holding Natural Health Trends or give up 1.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD SPORTS FASH vs. Natural Health Trends
Performance |
| Timeline |
| JD SPORTS FASH |
| Natural Health Trends |
JD SPORTS and Natural Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD SPORTS and Natural Health
The main advantage of trading using opposite JD SPORTS and Natural Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD SPORTS position performs unexpectedly, Natural Health 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 Natural Health will offset losses from the drop in Natural Health's long position.| JD SPORTS vs. RYU Apparel | JD SPORTS vs. Titan Machinery | JD SPORTS vs. Granite Construction | JD SPORTS vs. AM EAGLE OUTFITTERS |
| Natural Health vs. ANGLER GAMING PLC | Natural Health vs. Hochschild Mining plc | Natural Health vs. HOCHSCHILD MINING | Natural Health vs. OURGAME INTHOLDL 00005 |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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