Correlation Between JD Sports and Take Two
Can any of the company-specific risk be diversified away by investing in both JD Sports and Take Two 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 Take Two 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 Take Two Interactive Software, you can compare the effects of market volatilities on JD Sports and Take Two 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 Take Two. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and Take Two.
Diversification Opportunities for JD Sports and Take Two
Pay attention - limited upside
The 3 months correlation between JD Sports and Take is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and Take Two Interactive Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Take Two Interactive 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 Take Two. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Take Two Interactive has no effect on the direction of JD Sports i.e., JD Sports and Take Two go up and down completely randomly.
Pair Corralation between JD Sports and Take Two
Assuming the 90 days trading horizon JD Sports Fashion is expected to under-perform the Take Two. In addition to that, JD Sports is 2.01 times more volatile than Take Two Interactive Software. It trades about -0.45 of its total potential returns per unit of risk. Take Two Interactive Software is currently generating about 0.42 per unit of volatility. If you would invest 16,085 in Take Two Interactive Software on August 27, 2024 and sell it today you would earn a total of 2,639 from holding Take Two Interactive Software or generate 16.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD Sports Fashion vs. Take Two Interactive Software
Performance |
| Timeline |
| JD Sports Fashion |
| Take Two Interactive |
JD Sports and Take Two Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Sports and Take Two
The main advantage of trading using opposite JD Sports and Take Two positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports position performs unexpectedly, Take Two 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 Take Two will offset losses from the drop in Take Two's long position.| JD Sports vs. Universal Display Corp | JD Sports vs. Gamma Communications PLC | JD Sports vs. Leroy Seafood Group | JD Sports vs. Batm Advanced Communications |
| Take Two vs. Samsung Electronics Co | Take Two vs. Samsung Electronics Co | Take Two vs. Hyundai Motor | Take Two vs. Toyota Motor Corp |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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