Correlation Between JD Sports and MT Bank
Can any of the company-specific risk be diversified away by investing in both JD Sports and MT Bank 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 MT Bank 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 MT Bank Corp, you can compare the effects of market volatilities on JD Sports and MT Bank 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 MT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and MT Bank.
Diversification Opportunities for JD Sports and MT Bank
Pay attention - limited upside
The 3 months correlation between JD Sports and 0JW2 is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and MT Bank Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MT Bank Corp 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 MT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MT Bank Corp has no effect on the direction of JD Sports i.e., JD Sports and MT Bank go up and down completely randomly.
Pair Corralation between JD Sports and MT Bank
Assuming the 90 days trading horizon JD Sports Fashion is expected to generate 1.79 times more return on investment than MT Bank. However, JD Sports is 1.79 times more volatile than MT Bank Corp. It trades about 0.04 of its potential returns per unit of risk. MT Bank Corp is currently generating about -0.48 per unit of risk. If you would invest 9,346 in JD Sports Fashion on September 23, 2024 and sell it today you would earn a total of 154.00 from holding JD Sports Fashion or generate 1.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
JD Sports Fashion vs. MT Bank Corp
Performance |
| Timeline |
| JD Sports Fashion |
| MT Bank Corp |
JD Sports and MT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Sports and MT Bank
The main advantage of trading using opposite JD Sports and MT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports position performs unexpectedly, MT Bank 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 MT Bank will offset losses from the drop in MT Bank's long position.| JD Sports vs. MT Bank Corp | JD Sports vs. Sparebank 1 SR | JD Sports vs. Cembra Money Bank | JD Sports vs. Panther Metals PLC |
| MT Bank vs. Uniper SE | MT Bank vs. Mulberry Group PLC | MT Bank vs. London Security Plc | MT Bank vs. Triad Group PLC |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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