Correlation Between JD Sports and McEwen Mining
Can any of the company-specific risk be diversified away by investing in both JD Sports and McEwen Mining 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 McEwen Mining 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 McEwen Mining, you can compare the effects of market volatilities on JD Sports and McEwen Mining 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 McEwen Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and McEwen Mining.
Diversification Opportunities for JD Sports and McEwen Mining
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between JD Sports and McEwen is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and McEwen Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McEwen Mining 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 McEwen Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of McEwen Mining has no effect on the direction of JD Sports i.e., JD Sports and McEwen Mining go up and down completely randomly.
Pair Corralation between JD Sports and McEwen Mining
Assuming the 90 days trading horizon JD Sports Fashion is expected to under-perform the McEwen Mining. In addition to that, JD Sports is 1.25 times more volatile than McEwen Mining. It trades about -0.14 of its total potential returns per unit of risk. McEwen Mining is currently generating about 0.13 per unit of volatility. If you would invest 829.00 in McEwen Mining on September 12, 2024 and sell it today you would earn a total of 74.00 from holding McEwen Mining or generate 8.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD Sports Fashion vs. McEwen Mining
Performance |
| Timeline |
| JD Sports Fashion |
| McEwen Mining |
JD Sports and McEwen Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Sports and McEwen Mining
The main advantage of trading using opposite JD Sports and McEwen Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports position performs unexpectedly, McEwen Mining 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 McEwen Mining will offset losses from the drop in McEwen Mining's long position.| JD Sports vs. National Atomic Co | JD Sports vs. OTP Bank Nyrt | JD Sports vs. Samsung Electronics Co | JD Sports vs. Samsung Electronics Co |
| McEwen Mining vs. Impax Environmental Markets | McEwen Mining vs. Amedeo Air Four | McEwen Mining vs. Sealed Air Corp | McEwen Mining vs. Flow Traders NV |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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