Correlation Between JD SPORTS and X-FAB Silicon
Can any of the company-specific risk be diversified away by investing in both JD SPORTS and X-FAB Silicon 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 X-FAB Silicon 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 X FAB Silicon Foundries, you can compare the effects of market volatilities on JD SPORTS and X-FAB Silicon 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 X-FAB Silicon. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD SPORTS and X-FAB Silicon.
Diversification Opportunities for JD SPORTS and X-FAB Silicon
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 9JD and X-FAB is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding JD SPORTS FASH and X FAB Silicon Foundries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X FAB Silicon 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 X-FAB Silicon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X FAB Silicon has no effect on the direction of JD SPORTS i.e., JD SPORTS and X-FAB Silicon go up and down completely randomly.
Pair Corralation between JD SPORTS and X-FAB Silicon
Assuming the 90 days horizon JD SPORTS FASH is expected to under-perform the X-FAB Silicon. But the stock apears to be less risky and, when comparing its historical volatility, JD SPORTS FASH is 1.06 times less risky than X-FAB Silicon. The stock trades about -0.39 of its potential returns per unit of risk. The X FAB Silicon Foundries is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 501.00 in X FAB Silicon Foundries on October 9, 2024 and sell it today you would lose (6.00) from holding X FAB Silicon Foundries or give up 1.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD SPORTS FASH vs. X FAB Silicon Foundries
Performance |
| Timeline |
| JD SPORTS FASH |
| X FAB Silicon |
JD SPORTS and X-FAB Silicon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD SPORTS and X-FAB Silicon
The main advantage of trading using opposite JD SPORTS and X-FAB Silicon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD SPORTS position performs unexpectedly, X-FAB Silicon 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 X-FAB Silicon will offset losses from the drop in X-FAB Silicon's long position.| JD SPORTS vs. Superior Plus Corp | JD SPORTS vs. NMI Holdings | JD SPORTS vs. SIVERS SEMICONDUCTORS AB | JD SPORTS vs. Talanx AG |
| X-FAB Silicon vs. HANOVER INSURANCE | X-FAB Silicon vs. Reinsurance Group of | X-FAB Silicon vs. Plastic Omnium | X-FAB Silicon vs. SBI Insurance Group |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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