Correlation Between JD Sports and Panasonic Corp
Can any of the company-specific risk be diversified away by investing in both JD Sports and Panasonic Corp 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 Panasonic Corp 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 Panasonic Corp, you can compare the effects of market volatilities on JD Sports and Panasonic Corp 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 Panasonic Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and Panasonic Corp.
Diversification Opportunities for JD Sports and Panasonic Corp
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between JD Sports and Panasonic is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and Panasonic Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panasonic Corp 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 Panasonic Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panasonic Corp has no effect on the direction of JD Sports i.e., JD Sports and Panasonic Corp go up and down completely randomly.
Pair Corralation between JD Sports and Panasonic Corp
Assuming the 90 days trading horizon JD Sports Fashion is expected to under-perform the Panasonic Corp. In addition to that, JD Sports is 3.34 times more volatile than Panasonic Corp. It trades about -0.2 of its total potential returns per unit of risk. Panasonic Corp is currently generating about -0.57 per unit of volatility. If you would invest 160,200 in Panasonic Corp on October 30, 2024 and sell it today you would lose (8,250) from holding Panasonic Corp or give up 5.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 50.0% |
| Values | Daily Returns |
JD Sports Fashion vs. Panasonic Corp
Performance |
| Timeline |
| JD Sports Fashion |
| Panasonic Corp |
JD Sports and Panasonic Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Sports and Panasonic Corp
The main advantage of trading using opposite JD Sports and Panasonic Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports position performs unexpectedly, Panasonic Corp 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 Panasonic Corp will offset losses from the drop in Panasonic Corp's long position.| JD Sports vs. URU Metals | JD Sports vs. European Metals Holdings | JD Sports vs. Europa Metals | JD Sports vs. Roadside Real Estate |
| Panasonic Corp vs. Zoom Video Communications | Panasonic Corp vs. Zegona Communications Plc | Panasonic Corp vs. Fonix Mobile plc | Panasonic Corp vs. Seche Environnement SA |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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