Correlation Between JD Sports and Systemair
Can any of the company-specific risk be diversified away by investing in both JD Sports and Systemair 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 JD Sports and Systemair into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JD Sports Fashion and Systemair AB, you can compare the effects of market volatilities on JD Sports and Systemair 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 JD Sports with a short position of Systemair. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and Systemair.
Diversification Opportunities for JD Sports and Systemair
Significant diversification
The 3 months correlation between JD Sports and Systemair is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and Systemair AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Systemair AB and JD Sports 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 JD Sports Fashion are associated (or correlated) with Systemair. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Systemair AB has no effect on the direction of JD Sports i.e., JD Sports and Systemair go up and down completely randomly.
Pair Corralation between JD Sports and Systemair
Assuming the 90 days trading horizon JD Sports Fashion is expected to under-perform the Systemair. In addition to that, JD Sports is 1.45 times more volatile than Systemair AB. It trades about -0.04 of its total potential returns per unit of risk. Systemair AB is currently generating about 0.06 per unit of volatility. If you would invest 6,609 in Systemair AB on August 25, 2024 and sell it today you would earn a total of 2,471 from holding Systemair AB or generate 37.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.32% |
| Values | Daily Returns |
JD Sports Fashion vs. Systemair AB
Performance |
| Timeline |
| JD Sports Fashion |
| Systemair AB |
JD Sports and Systemair Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Sports and Systemair
The main advantage of trading using opposite JD Sports and Systemair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports position performs unexpectedly, Systemair 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 Systemair will offset losses from the drop in Systemair's long position.| JD Sports vs. Toyota Motor Corp | JD Sports vs. SoftBank Group Corp | JD Sports vs. State Bank of | JD Sports vs. Freddie Mac |
| Systemair vs. X FAB Silicon Foundries | Systemair vs. Darden Restaurants | Systemair vs. Summit Materials Cl | Systemair vs. Take Two Interactive Software |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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