Correlation Between JD Sports and Kinnevik Investment
Can any of the company-specific risk be diversified away by investing in both JD Sports and Kinnevik Investment 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 Kinnevik Investment 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 Kinnevik Investment AB, you can compare the effects of market volatilities on JD Sports and Kinnevik Investment 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 Kinnevik Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and Kinnevik Investment.
Diversification Opportunities for JD Sports and Kinnevik Investment
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between JD Sports and Kinnevik is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and Kinnevik Investment AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinnevik Investment 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 Kinnevik Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinnevik Investment has no effect on the direction of JD Sports i.e., JD Sports and Kinnevik Investment go up and down completely randomly.
Pair Corralation between JD Sports and Kinnevik Investment
Assuming the 90 days trading horizon JD Sports Fashion is expected to generate 1.3 times more return on investment than Kinnevik Investment. However, JD Sports is 1.3 times more volatile than Kinnevik Investment AB. It trades about -0.02 of its potential returns per unit of risk. Kinnevik Investment AB is currently generating about -0.07 per unit of risk. If you would invest 14,659 in JD Sports Fashion on September 1, 2024 and sell it today you would lose (4,479) from holding JD Sports Fashion or give up 30.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.95% |
| Values | Daily Returns |
JD Sports Fashion vs. Kinnevik Investment AB
Performance |
| Timeline |
| JD Sports Fashion |
| Kinnevik Investment |
JD Sports and Kinnevik Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Sports and Kinnevik Investment
The main advantage of trading using opposite JD Sports and Kinnevik Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports position performs unexpectedly, Kinnevik Investment 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 Kinnevik Investment will offset losses from the drop in Kinnevik Investment'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 |
| Kinnevik Investment vs. Arrow Electronics | Kinnevik Investment vs. Odfjell Drilling | Kinnevik Investment vs. Zanaga Iron Ore | Kinnevik Investment vs. Electronic Arts |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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