Correlation Between Alimentation Couchen and JD Sports
Can any of the company-specific risk be diversified away by investing in both Alimentation Couchen 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 Alimentation Couchen and JD Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alimentation Couchen Tard and JD Sports Fashion, you can compare the effects of market volatilities on Alimentation Couchen 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 Alimentation Couchen with a short position of JD Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alimentation Couchen and JD Sports.
Diversification Opportunities for Alimentation Couchen and JD Sports
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Alimentation and JDDSF is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Alimentation Couchen Tard and JD Sports Fashion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JD Sports Fashion and Alimentation Couchen 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 Alimentation Couchen Tard 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 Fashion has no effect on the direction of Alimentation Couchen i.e., Alimentation Couchen and JD Sports go up and down completely randomly.
Pair Corralation between Alimentation Couchen and JD Sports
Assuming the 90 days horizon Alimentation Couchen Tard is expected to generate 0.2 times more return on investment than JD Sports. However, Alimentation Couchen Tard is 5.08 times less risky than JD Sports. It trades about -0.27 of its potential returns per unit of risk. JD Sports Fashion is currently generating about -0.31 per unit of risk. If you would invest 5,558 in Alimentation Couchen Tard on October 28, 2024 and sell it today you would lose (279.00) from holding Alimentation Couchen Tard or give up 5.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alimentation Couchen Tard vs. JD Sports Fashion
Performance |
| Timeline |
| Alimentation Couchen Tard |
| JD Sports Fashion |
Alimentation Couchen and JD Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alimentation Couchen and JD Sports
The main advantage of trading using opposite Alimentation Couchen and JD Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alimentation Couchen 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' long position.| Alimentation Couchen vs. Arko Corp | Alimentation Couchen vs. Arko Corp | Alimentation Couchen vs. Sportsmans | Alimentation Couchen vs. Murphy USA |
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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