Correlation Between JD Sports and Amedeo Air
Can any of the company-specific risk be diversified away by investing in both JD Sports and Amedeo Air 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 Amedeo Air 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 Amedeo Air Four, you can compare the effects of market volatilities on JD Sports and Amedeo Air 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 Amedeo Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and Amedeo Air.
Diversification Opportunities for JD Sports and Amedeo Air
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JD Sports and Amedeo is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and Amedeo Air Four in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amedeo Air Four 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 Amedeo Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amedeo Air Four has no effect on the direction of JD Sports i.e., JD Sports and Amedeo Air go up and down completely randomly.
Pair Corralation between JD Sports and Amedeo Air
Assuming the 90 days trading horizon JD Sports Fashion is expected to under-perform the Amedeo Air. In addition to that, JD Sports is 7.1 times more volatile than Amedeo Air Four. It trades about -0.27 of its total potential returns per unit of risk. Amedeo Air Four is currently generating about 0.64 per unit of volatility. If you would invest 4,950 in Amedeo Air Four on August 28, 2024 and sell it today you would earn a total of 430.00 from holding Amedeo Air Four or generate 8.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD Sports Fashion vs. Amedeo Air Four
Performance |
| Timeline |
| JD Sports Fashion |
| Amedeo Air Four |
JD Sports and Amedeo Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Sports and Amedeo Air
The main advantage of trading using opposite JD Sports and Amedeo Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports position performs unexpectedly, Amedeo Air 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 Amedeo Air will offset losses from the drop in Amedeo Air's long position.| JD Sports vs. Lloyds Banking Group | JD Sports vs. Premier African Minerals | JD Sports vs. SANTANDER UK 8 | JD Sports vs. 88 Energy |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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