Correlation Between JD Sports and Wolters Kluwer
Can any of the company-specific risk be diversified away by investing in both JD Sports and Wolters Kluwer 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 Wolters Kluwer 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 Wolters Kluwer, you can compare the effects of market volatilities on JD Sports and Wolters Kluwer 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 Wolters Kluwer. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and Wolters Kluwer.
Diversification Opportunities for JD Sports and Wolters Kluwer
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JD Sports and Wolters is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and Wolters Kluwer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wolters Kluwer 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 Wolters Kluwer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wolters Kluwer has no effect on the direction of JD Sports i.e., JD Sports and Wolters Kluwer go up and down completely randomly.
Pair Corralation between JD Sports and Wolters Kluwer
Assuming the 90 days trading horizon JD Sports Fashion is expected to under-perform the Wolters Kluwer. In addition to that, JD Sports is 6.69 times more volatile than Wolters Kluwer. It trades about -0.15 of its total potential returns per unit of risk. Wolters Kluwer is currently generating about 0.42 per unit of volatility. If you would invest 15,308 in Wolters Kluwer on September 18, 2024 and sell it today you would earn a total of 922.00 from holding Wolters Kluwer or generate 6.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
JD Sports Fashion vs. Wolters Kluwer
Performance |
| Timeline |
| JD Sports Fashion |
| Wolters Kluwer |
JD Sports and Wolters Kluwer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Sports and Wolters Kluwer
The main advantage of trading using opposite JD Sports and Wolters Kluwer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports position performs unexpectedly, Wolters Kluwer 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 Wolters Kluwer will offset losses from the drop in Wolters Kluwer's long position.| JD Sports vs. Air Products Chemicals | JD Sports vs. Mindflair Plc | JD Sports vs. European Metals Holdings | JD Sports vs. GoldMining |
| Wolters Kluwer vs. Compal Electronics GDR | Wolters Kluwer vs. Synthomer plc | Wolters Kluwer vs. Scandic Hotels Group | Wolters Kluwer vs. JD Sports Fashion |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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