Correlation Between JD Sports and Public Service
Can any of the company-specific risk be diversified away by investing in both JD Sports and Public Service 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 Public Service 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 Public Service Enterprise, you can compare the effects of market volatilities on JD Sports and Public Service 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 Public Service. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and Public Service.
Diversification Opportunities for JD Sports and Public Service
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between JD Sports and Public is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and Public Service Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Service Enterprise 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 Public Service. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Public Service Enterprise has no effect on the direction of JD Sports i.e., JD Sports and Public Service go up and down completely randomly.
Pair Corralation between JD Sports and Public Service
Assuming the 90 days trading horizon JD Sports Fashion is expected to under-perform the Public Service. In addition to that, JD Sports is 1.53 times more volatile than Public Service Enterprise. It trades about -0.2 of its total potential returns per unit of risk. Public Service Enterprise is currently generating about -0.04 per unit of volatility. If you would invest 8,529 in Public Service Enterprise on November 6, 2024 and sell it today you would lose (155.00) from holding Public Service Enterprise or give up 1.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
JD Sports Fashion vs. Public Service Enterprise
Performance |
| Timeline |
| JD Sports Fashion |
| Public Service Enterprise |
JD Sports and Public Service Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Sports and Public Service
The main advantage of trading using opposite JD Sports and Public Service positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports position performs unexpectedly, Public Service 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 Public Service will offset losses from the drop in Public Service's long position.| JD Sports vs. Universal Music Group | JD Sports vs. Air Products Chemicals | JD Sports vs. Alliance Data Systems | JD Sports vs. Rosslyn Data Technologies |
| Public Service vs. Moneta Money Bank | Public Service vs. Cembra Money Bank | Public Service vs. Zinc Media Group | Public Service vs. Sydbank |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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