Correlation Between JD Sports and Schweiter Technologies
Can any of the company-specific risk be diversified away by investing in both JD Sports and Schweiter Technologies 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 Schweiter Technologies 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 Schweiter Technologies AG, you can compare the effects of market volatilities on JD Sports and Schweiter Technologies 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 Schweiter Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and Schweiter Technologies.
Diversification Opportunities for JD Sports and Schweiter Technologies
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between JD Sports and Schweiter is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and Schweiter Technologies AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schweiter Technologies 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 Schweiter Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schweiter Technologies has no effect on the direction of JD Sports i.e., JD Sports and Schweiter Technologies go up and down completely randomly.
Pair Corralation between JD Sports and Schweiter Technologies
Assuming the 90 days trading horizon JD Sports Fashion is expected to generate 3.33 times more return on investment than Schweiter Technologies. However, JD Sports is 3.33 times more volatile than Schweiter Technologies AG. It trades about 0.05 of its potential returns per unit of risk. Schweiter Technologies AG is currently generating about -0.04 per unit of risk. If you would invest 3,006 in JD Sports Fashion on November 28, 2024 and sell it today you would earn a total of 4,994 from holding JD Sports Fashion or generate 166.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
JD Sports Fashion vs. Schweiter Technologies AG
Performance |
| Timeline |
| JD Sports Fashion |
| Schweiter Technologies |
JD Sports and Schweiter Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Sports and Schweiter Technologies
The main advantage of trading using opposite JD Sports and Schweiter Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports position performs unexpectedly, Schweiter Technologies 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 Schweiter Technologies will offset losses from the drop in Schweiter Technologies' long position.| JD Sports vs. Atresmedia | JD Sports vs. Vitec Software Group | JD Sports vs. AcadeMedia AB | JD Sports vs. Zoom Video Communications |
| Schweiter Technologies vs. Naked Wines plc | Schweiter Technologies vs. Synthomer plc | Schweiter Technologies vs. Zegona Communications Plc | Schweiter Technologies vs. Bigblu Broadband 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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