Correlation Between GreenX Metals and JD Sports
Can any of the company-specific risk be diversified away by investing in both GreenX Metals 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 GreenX Metals and JD Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GreenX Metals and JD Sports Fashion, you can compare the effects of market volatilities on GreenX Metals 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 GreenX Metals with a short position of JD Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenX Metals and JD Sports.
Diversification Opportunities for GreenX Metals and JD Sports
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between GreenX and JD Sports is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding GreenX Metals 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 GreenX Metals 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 GreenX Metals 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 GreenX Metals i.e., GreenX Metals and JD Sports go up and down completely randomly.
Pair Corralation between GreenX Metals and JD Sports
Assuming the 90 days trading horizon GreenX Metals is expected to generate 0.6 times more return on investment than JD Sports. However, GreenX Metals is 1.67 times less risky than JD Sports. It trades about -0.3 of its potential returns per unit of risk. JD Sports Fashion is currently generating about -0.23 per unit of risk. If you would invest 4,150 in GreenX Metals on August 30, 2024 and sell it today you would lose (650.00) from holding GreenX Metals or give up 15.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GreenX Metals vs. JD Sports Fashion
Performance |
| Timeline |
| GreenX Metals |
| JD Sports Fashion |
GreenX Metals and JD Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GreenX Metals and JD Sports
The main advantage of trading using opposite GreenX Metals and JD Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenX Metals 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.| GreenX Metals vs. Vitec Software Group | GreenX Metals vs. Allianz Technology Trust | GreenX Metals vs. Spotify Technology SA | GreenX Metals vs. Microchip Technology |
| JD Sports vs. Ondine Biomedical | JD Sports vs. Europa Metals | JD Sports vs. Lendinvest PLC | JD Sports vs. Neometals |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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