Correlation Between JD Sports and Axway Software
Can any of the company-specific risk be diversified away by investing in both JD Sports and Axway Software 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 Axway Software 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 Axway Software SA, you can compare the effects of market volatilities on JD Sports and Axway Software 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 Axway Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and Axway Software.
Diversification Opportunities for JD Sports and Axway Software
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JD Sports and Axway is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and Axway Software SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axway Software SA 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 Axway Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axway Software SA has no effect on the direction of JD Sports i.e., JD Sports and Axway Software go up and down completely randomly.
Pair Corralation between JD Sports and Axway Software
Assuming the 90 days trading horizon JD Sports Fashion is expected to under-perform the Axway Software. In addition to that, JD Sports is 2.39 times more volatile than Axway Software SA. It trades about -0.1 of its total potential returns per unit of risk. Axway Software SA is currently generating about 0.13 per unit of volatility. If you would invest 2,200 in Axway Software SA on October 26, 2024 and sell it today you would earn a total of 490.00 from holding Axway Software SA or generate 22.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD Sports Fashion vs. Axway Software SA
Performance |
| Timeline |
| JD Sports Fashion |
| Axway Software SA |
JD Sports and Axway Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Sports and Axway Software
The main advantage of trading using opposite JD Sports and Axway Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports position performs unexpectedly, Axway Software 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 Axway Software will offset losses from the drop in Axway Software's 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 |
| Axway Software vs. Berkshire Hathaway | Axway Software vs. Samsung Electronics Co | Axway Software vs. Samsung Electronics Co | Axway Software 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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