Correlation Between JD Sports and United Airlines
Can any of the company-specific risk be diversified away by investing in both JD Sports and United Airlines 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 United Airlines 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 United Airlines Holdings, you can compare the effects of market volatilities on JD Sports and United Airlines 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 United Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and United Airlines.
Diversification Opportunities for JD Sports and United Airlines
-0.93 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between JD Sports and United is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and United Airlines Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Airlines Holdings 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 United Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Airlines Holdings has no effect on the direction of JD Sports i.e., JD Sports and United Airlines go up and down completely randomly.
Pair Corralation between JD Sports and United Airlines
Assuming the 90 days trading horizon JD Sports Fashion is expected to under-perform the United Airlines. In addition to that, JD Sports is 1.09 times more volatile than United Airlines Holdings. It trades about -0.1 of its total potential returns per unit of risk. United Airlines Holdings is currently generating about 0.24 per unit of volatility. If you would invest 4,677 in United Airlines Holdings on October 26, 2024 and sell it today you would earn a total of 5,846 from holding United Airlines Holdings or generate 124.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 98.43% |
| Values | Daily Returns |
JD Sports Fashion vs. United Airlines Holdings
Performance |
| Timeline |
| JD Sports Fashion |
| United Airlines Holdings |
JD Sports and United Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Sports and United Airlines
The main advantage of trading using opposite JD Sports and United Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports position performs unexpectedly, United Airlines 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 United Airlines will offset losses from the drop in United Airlines' long position.| JD Sports vs. Hollywood Bowl Group | JD Sports vs. Ubisoft Entertainment | JD Sports vs. Axway Software SA | JD Sports vs. Live Nation Entertainment |
| United Airlines vs. Berkshire Hathaway | United Airlines vs. Samsung Electronics Co | United Airlines vs. Samsung Electronics Co | United Airlines vs. Chocoladefabriken Lindt Spruengli |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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