Correlation Between JD Sports and BW Offshore
Can any of the company-specific risk be diversified away by investing in both JD Sports and BW Offshore 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 BW Offshore 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 BW Offshore, you can compare the effects of market volatilities on JD Sports and BW Offshore 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 BW Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and BW Offshore.
Diversification Opportunities for JD Sports and BW Offshore
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between JD Sports and 0RKH is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and BW Offshore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BW Offshore 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 BW Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BW Offshore has no effect on the direction of JD Sports i.e., JD Sports and BW Offshore go up and down completely randomly.
Pair Corralation between JD Sports and BW Offshore
Assuming the 90 days trading horizon JD Sports Fashion is expected to under-perform the BW Offshore. In addition to that, JD Sports is 2.14 times more volatile than BW Offshore. It trades about -0.18 of its total potential returns per unit of risk. BW Offshore is currently generating about 0.04 per unit of volatility. If you would invest 2,636 in BW Offshore on September 19, 2024 and sell it today you would earn a total of 34.00 from holding BW Offshore or generate 1.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD Sports Fashion vs. BW Offshore
Performance |
| Timeline |
| JD Sports Fashion |
| BW Offshore |
JD Sports and BW Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Sports and BW Offshore
The main advantage of trading using opposite JD Sports and BW Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports position performs unexpectedly, BW Offshore 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 BW Offshore will offset losses from the drop in BW Offshore's long position.| JD Sports vs. Samsung Electronics Co | JD Sports vs. Samsung Electronics Co | JD Sports vs. Hyundai Motor | JD Sports vs. Toyota Motor Corp |
| BW Offshore vs. Odfjell Drilling | BW Offshore vs. Aberdeen Diversified Income | BW Offshore vs. Gaztransport et Technigaz | BW Offshore vs. JD Sports Fashion |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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