Correlation Between American Homes and JD SPORTS
Can any of the company-specific risk be diversified away by investing in both American Homes and JD SPORTS 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 American Homes and JD SPORTS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Homes 4 and JD SPORTS FASH, you can compare the effects of market volatilities on American Homes and JD SPORTS 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 American Homes with a short position of JD SPORTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Homes and JD SPORTS.
Diversification Opportunities for American Homes and JD SPORTS
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and 9JD is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding American Homes 4 and JD SPORTS FASH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JD SPORTS FASH and American Homes 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 American Homes 4 are associated (or correlated) with JD SPORTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JD SPORTS FASH has no effect on the direction of American Homes i.e., American Homes and JD SPORTS go up and down completely randomly.
Pair Corralation between American Homes and JD SPORTS
Assuming the 90 days trading horizon American Homes 4 is expected to generate 0.61 times more return on investment than JD SPORTS. However, American Homes 4 is 1.64 times less risky than JD SPORTS. It trades about 0.03 of its potential returns per unit of risk. JD SPORTS FASH is currently generating about -0.04 per unit of risk. If you would invest 3,312 in American Homes 4 on September 21, 2024 and sell it today you would earn a total of 148.00 from holding American Homes 4 or generate 4.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Homes 4 vs. JD SPORTS FASH
Performance |
| Timeline |
| American Homes 4 |
| JD SPORTS FASH |
American Homes and JD SPORTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Homes and JD SPORTS
The main advantage of trading using opposite American Homes and JD SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Homes position performs unexpectedly, JD SPORTS 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 JD SPORTS will offset losses from the drop in JD SPORTS's long position.| American Homes vs. INVITATION HOMES DL | American Homes vs. Superior Plus Corp | American Homes vs. SIVERS SEMICONDUCTORS AB | American Homes vs. NorAm Drilling AS |
| JD SPORTS vs. LGI Homes | JD SPORTS vs. American Homes 4 | JD SPORTS vs. X FAB Silicon Foundries | JD SPORTS vs. Haier Smart Home |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |