Correlation Between JD Sports and Givaudan
Can any of the company-specific risk be diversified away by investing in both JD Sports and Givaudan 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 Givaudan 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 Givaudan SA, you can compare the effects of market volatilities on JD Sports and Givaudan 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 Givaudan. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and Givaudan.
Diversification Opportunities for JD Sports and Givaudan
Very poor diversification
The 3 months correlation between JD Sports and Givaudan is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and Givaudan SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Givaudan 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 Givaudan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Givaudan SA has no effect on the direction of JD Sports i.e., JD Sports and Givaudan go up and down completely randomly.
Pair Corralation between JD Sports and Givaudan
Assuming the 90 days trading horizon JD Sports Fashion is expected to under-perform the Givaudan. In addition to that, JD Sports is 2.44 times more volatile than Givaudan SA. It trades about -0.02 of its total potential returns per unit of risk. Givaudan SA is currently generating about 0.07 per unit of volatility. If you would invest 286,459 in Givaudan SA on September 1, 2024 and sell it today you would earn a total of 100,291 from holding Givaudan SA or generate 35.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.73% |
| Values | Daily Returns |
JD Sports Fashion vs. Givaudan SA
Performance |
| Timeline |
| JD Sports Fashion |
| Givaudan SA |
JD Sports and Givaudan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Sports and Givaudan
The main advantage of trading using opposite JD Sports and Givaudan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports position performs unexpectedly, Givaudan 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 Givaudan will offset losses from the drop in Givaudan's long position.| JD Sports vs. Toyota Motor Corp | JD Sports vs. SoftBank Group Corp | JD Sports vs. OTP Bank Nyrt | JD Sports vs. Las Vegas Sands |
| Givaudan vs. Antofagasta PLC | Givaudan vs. Centamin PLC | Givaudan vs. Atalaya Mining | Givaudan vs. Ferrexpo PLC |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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