Correlation Between JD Sports and Centaur Media
Can any of the company-specific risk be diversified away by investing in both JD Sports and Centaur Media 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 Centaur Media 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 Centaur Media, you can compare the effects of market volatilities on JD Sports and Centaur Media 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 Centaur Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and Centaur Media.
Diversification Opportunities for JD Sports and Centaur Media
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JD Sports and Centaur is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and Centaur Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centaur Media 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 Centaur Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centaur Media has no effect on the direction of JD Sports i.e., JD Sports and Centaur Media go up and down completely randomly.
Pair Corralation between JD Sports and Centaur Media
Assuming the 90 days trading horizon JD Sports Fashion is expected to under-perform the Centaur Media. In addition to that, JD Sports is 2.68 times more volatile than Centaur Media. It trades about -0.23 of its total potential returns per unit of risk. Centaur Media is currently generating about 0.01 per unit of volatility. If you would invest 2,300 in Centaur Media on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Centaur Media or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD Sports Fashion vs. Centaur Media
Performance |
| Timeline |
| JD Sports Fashion |
| Centaur Media |
JD Sports and Centaur Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Sports and Centaur Media
The main advantage of trading using opposite JD Sports and Centaur Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports position performs unexpectedly, Centaur Media 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 Centaur Media will offset losses from the drop in Centaur Media's long position.| JD Sports vs. Ondine Biomedical | JD Sports vs. Europa Metals | JD Sports vs. Lendinvest PLC | JD Sports vs. Neometals |
| Centaur Media vs. Walmart | Centaur Media vs. BYD Co | Centaur Media vs. Volkswagen AG | Centaur Media vs. Volkswagen AG Non Vtg |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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