Correlation Between JD SPORTS and Sunstone Hotel
Can any of the company-specific risk be diversified away by investing in both JD SPORTS and Sunstone Hotel 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 Sunstone Hotel 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 Sunstone Hotel Investors, you can compare the effects of market volatilities on JD SPORTS and Sunstone Hotel 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 Sunstone Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD SPORTS and Sunstone Hotel.
Diversification Opportunities for JD SPORTS and Sunstone Hotel
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 9JD and Sunstone is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding JD SPORTS FASH and Sunstone Hotel Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunstone Hotel Investors 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 Sunstone Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunstone Hotel Investors has no effect on the direction of JD SPORTS i.e., JD SPORTS and Sunstone Hotel go up and down completely randomly.
Pair Corralation between JD SPORTS and Sunstone Hotel
Assuming the 90 days horizon JD SPORTS FASH is expected to under-perform the Sunstone Hotel. In addition to that, JD SPORTS is 1.75 times more volatile than Sunstone Hotel Investors. It trades about -0.13 of its total potential returns per unit of risk. Sunstone Hotel Investors is currently generating about 0.11 per unit of volatility. If you would invest 899.00 in Sunstone Hotel Investors on November 2, 2024 and sell it today you would earn a total of 191.00 from holding Sunstone Hotel Investors or generate 21.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD SPORTS FASH vs. Sunstone Hotel Investors
Performance |
| Timeline |
| JD SPORTS FASH |
| Sunstone Hotel Investors |
JD SPORTS and Sunstone Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD SPORTS and Sunstone Hotel
The main advantage of trading using opposite JD SPORTS and Sunstone Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD SPORTS position performs unexpectedly, Sunstone Hotel 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 Sunstone Hotel will offset losses from the drop in Sunstone Hotel's long position.| JD SPORTS vs. PennyMac Mortgage Investment | JD SPORTS vs. PLAYWAY SA ZY 10 | JD SPORTS vs. PennantPark Investment | JD SPORTS vs. Scottish Mortgage Investment |
| Sunstone Hotel vs. Hemisphere Energy Corp | Sunstone Hotel vs. AECOM TECHNOLOGY | Sunstone Hotel vs. Kingdee International Software | Sunstone Hotel vs. MACOM Technology Solutions |
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 Stocks Directory module to find actively traded stocks across global markets.
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