Correlation Between JD SPORTS and NVIDIA
Can any of the company-specific risk be diversified away by investing in both JD SPORTS and NVIDIA 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 NVIDIA 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 NVIDIA, you can compare the effects of market volatilities on JD SPORTS and NVIDIA 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 NVIDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD SPORTS and NVIDIA.
Diversification Opportunities for JD SPORTS and NVIDIA
Excellent diversification
The 3 months correlation between 9JD and NVIDIA is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding JD SPORTS FASH and NVIDIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NVIDIA 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 NVIDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NVIDIA has no effect on the direction of JD SPORTS i.e., JD SPORTS and NVIDIA go up and down completely randomly.
Pair Corralation between JD SPORTS and NVIDIA
Assuming the 90 days horizon JD SPORTS FASH is expected to under-perform the NVIDIA. In addition to that, JD SPORTS is 1.65 times more volatile than NVIDIA. It trades about -0.36 of its total potential returns per unit of risk. NVIDIA is currently generating about 0.12 per unit of volatility. If you would invest 12,942 in NVIDIA on August 25, 2024 and sell it today you would earn a total of 720.00 from holding NVIDIA or generate 5.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
JD SPORTS FASH vs. NVIDIA
Performance |
| Timeline |
| JD SPORTS FASH |
| NVIDIA |
JD SPORTS and NVIDIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD SPORTS and NVIDIA
The main advantage of trading using opposite JD SPORTS and NVIDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD SPORTS position performs unexpectedly, NVIDIA 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 NVIDIA will offset losses from the drop in NVIDIA's long position.| JD SPORTS vs. FAST RETAIL ADR | JD SPORTS vs. AOYAMA TRADING | JD SPORTS vs. J JILL INC | JD SPORTS vs. Superior Plus Corp |
| NVIDIA vs. Clean Energy Fuels | NVIDIA vs. ARISTOCRAT LEISURE | NVIDIA vs. Universal Display | NVIDIA 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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