Correlation Between Chemours and JD Sports
Can any of the company-specific risk be diversified away by investing in both Chemours 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 Chemours and JD Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chemours Co and JD Sports Fashion, you can compare the effects of market volatilities on Chemours 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 Chemours with a short position of JD Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chemours and JD Sports.
Diversification Opportunities for Chemours and JD Sports
Very good diversification
The 3 months correlation between Chemours and JDDSF is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Chemours Co 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 Chemours 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 Chemours Co 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 Chemours i.e., Chemours and JD Sports go up and down completely randomly.
Pair Corralation between Chemours and JD Sports
Allowing for the 90-day total investment horizon Chemours Co is expected to under-perform the JD Sports. But the stock apears to be less risky and, when comparing its historical volatility, Chemours Co is 1.39 times less risky than JD Sports. The stock trades about 0.0 of its potential returns per unit of risk. The JD Sports Fashion is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 109.00 in JD Sports Fashion on September 3, 2024 and sell it today you would earn a total of 37.00 from holding JD Sports Fashion or generate 33.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chemours Co vs. JD Sports Fashion
Performance |
| Timeline |
| Chemours |
| JD Sports Fashion |
Chemours and JD Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chemours and JD Sports
The main advantage of trading using opposite Chemours and JD Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chemours 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.| Chemours vs. SPACE | Chemours vs. Bayview Acquisition Corp | Chemours vs. T Rowe Price | Chemours vs. Ampleforth |
| JD Sports vs. Guess Inc | JD Sports vs. Foot Locker | JD Sports vs. JPMorgan Chase Co | JD Sports vs. Home Depot |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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