Correlation Between JD SPORTS and ENN Energy
Can any of the company-specific risk be diversified away by investing in both JD SPORTS and ENN Energy 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 ENN Energy 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 ENN Energy Holdings, you can compare the effects of market volatilities on JD SPORTS and ENN Energy 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 ENN Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD SPORTS and ENN Energy.
Diversification Opportunities for JD SPORTS and ENN Energy
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 9JD and ENN is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding JD SPORTS FASH and ENN Energy Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENN Energy Holdings 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 ENN Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENN Energy Holdings has no effect on the direction of JD SPORTS i.e., JD SPORTS and ENN Energy go up and down completely randomly.
Pair Corralation between JD SPORTS and ENN Energy
Assuming the 90 days horizon JD SPORTS FASH is expected to under-perform the ENN Energy. But the stock apears to be less risky and, when comparing its historical volatility, JD SPORTS FASH is 1.1 times less risky than ENN Energy. The stock trades about -0.01 of its potential returns per unit of risk. The ENN Energy Holdings is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 596.00 in ENN Energy Holdings on September 12, 2024 and sell it today you would earn a total of 89.00 from holding ENN Energy Holdings or generate 14.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD SPORTS FASH vs. ENN Energy Holdings
Performance |
| Timeline |
| JD SPORTS FASH |
| ENN Energy Holdings |
JD SPORTS and ENN Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD SPORTS and ENN Energy
The main advantage of trading using opposite JD SPORTS and ENN Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD SPORTS position performs unexpectedly, ENN Energy 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 ENN Energy will offset losses from the drop in ENN Energy'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 |
| ENN Energy vs. COLUMBIA SPORTSWEAR | ENN Energy vs. InPlay Oil Corp | ENN Energy vs. Universal Display | ENN Energy 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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