Correlation Between JD SPORTS and INFORMATION SVC
Can any of the company-specific risk be diversified away by investing in both JD SPORTS and INFORMATION SVC 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 INFORMATION SVC 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 INFORMATION SVC GRP, you can compare the effects of market volatilities on JD SPORTS and INFORMATION SVC 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 INFORMATION SVC. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD SPORTS and INFORMATION SVC.
Diversification Opportunities for JD SPORTS and INFORMATION SVC
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 9JD and INFORMATION is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding JD SPORTS FASH and INFORMATION SVC GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INFORMATION SVC GRP 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 INFORMATION SVC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INFORMATION SVC GRP has no effect on the direction of JD SPORTS i.e., JD SPORTS and INFORMATION SVC go up and down completely randomly.
Pair Corralation between JD SPORTS and INFORMATION SVC
Assuming the 90 days horizon JD SPORTS FASH is expected to generate 0.81 times more return on investment than INFORMATION SVC. However, JD SPORTS FASH is 1.24 times less risky than INFORMATION SVC. It trades about 0.1 of its potential returns per unit of risk. INFORMATION SVC GRP is currently generating about -0.01 per unit of risk. If you would invest 98.00 in JD SPORTS FASH on November 22, 2024 and sell it today you would earn a total of 4.00 from holding JD SPORTS FASH or generate 4.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD SPORTS FASH vs. INFORMATION SVC GRP
Performance |
| Timeline |
| JD SPORTS FASH |
| INFORMATION SVC GRP |
JD SPORTS and INFORMATION SVC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD SPORTS and INFORMATION SVC
The main advantage of trading using opposite JD SPORTS and INFORMATION SVC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD SPORTS position performs unexpectedly, INFORMATION SVC 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 INFORMATION SVC will offset losses from the drop in INFORMATION SVC's long position.| JD SPORTS vs. Alfa Financial Software | JD SPORTS vs. Guidewire Software | JD SPORTS vs. Firan Technology Group | JD SPORTS vs. Sqs Software Quality |
| INFORMATION SVC vs. Northern Data AG | INFORMATION SVC vs. Alibaba Health Information | INFORMATION SVC vs. DATADOT TECHNOLOGY | INFORMATION SVC vs. Linedata Services SA |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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