Correlation Between Ecofin Global and JD Sports
Can any of the company-specific risk be diversified away by investing in both Ecofin Global 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 Ecofin Global and JD Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecofin Global Utilities and JD Sports Fashion, you can compare the effects of market volatilities on Ecofin Global 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 Ecofin Global with a short position of JD Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecofin Global and JD Sports.
Diversification Opportunities for Ecofin Global and JD Sports
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ecofin and JD Sports is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ecofin Global Utilities 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 Ecofin Global 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 Ecofin Global Utilities 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 Ecofin Global i.e., Ecofin Global and JD Sports go up and down completely randomly.
Pair Corralation between Ecofin Global and JD Sports
Assuming the 90 days trading horizon Ecofin Global Utilities is expected to generate 0.3 times more return on investment than JD Sports. However, Ecofin Global Utilities is 3.35 times less risky than JD Sports. It trades about 0.1 of its potential returns per unit of risk. JD Sports Fashion is currently generating about -0.11 per unit of risk. If you would invest 18,454 in Ecofin Global Utilities on September 4, 2024 and sell it today you would earn a total of 1,046 from holding Ecofin Global Utilities or generate 5.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ecofin Global Utilities vs. JD Sports Fashion
Performance |
| Timeline |
| Ecofin Global Utilities |
| JD Sports Fashion |
Ecofin Global and JD Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecofin Global and JD Sports
The main advantage of trading using opposite Ecofin Global and JD Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecofin Global 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.| Ecofin Global vs. SupplyMe Capital PLC | Ecofin Global vs. Lloyds Banking Group | Ecofin Global vs. Premier African Minerals | Ecofin Global vs. SANTANDER UK 8 |
| JD Sports vs. Check Point Software | JD Sports vs. Microchip Technology | JD Sports vs. Roper Technologies | JD Sports vs. Raytheon Technologies Corp |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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