Correlation Between JD Sports and Phoenix Group
Can any of the company-specific risk be diversified away by investing in both JD Sports and Phoenix Group 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 Phoenix Group 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 Phoenix Group Holdings, you can compare the effects of market volatilities on JD Sports and Phoenix Group 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 Phoenix Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and Phoenix Group.
Diversification Opportunities for JD Sports and Phoenix Group
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JD Sports and Phoenix is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and Phoenix Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phoenix Group Holdings 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 Phoenix Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phoenix Group Holdings has no effect on the direction of JD Sports i.e., JD Sports and Phoenix Group go up and down completely randomly.
Pair Corralation between JD Sports and Phoenix Group
Assuming the 90 days trading horizon JD Sports Fashion is expected to under-perform the Phoenix Group. In addition to that, JD Sports is 2.14 times more volatile than Phoenix Group Holdings. It trades about -0.02 of its total potential returns per unit of risk. Phoenix Group Holdings is currently generating about 0.02 per unit of volatility. If you would invest 48,253 in Phoenix Group Holdings on August 31, 2024 and sell it today you would earn a total of 3,397 from holding Phoenix Group Holdings or generate 7.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.74% |
| Values | Daily Returns |
JD Sports Fashion vs. Phoenix Group Holdings
Performance |
| Timeline |
| JD Sports Fashion |
| Phoenix Group Holdings |
JD Sports and Phoenix Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Sports and Phoenix Group
The main advantage of trading using opposite JD Sports and Phoenix Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports position performs unexpectedly, Phoenix Group 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 Phoenix Group will offset losses from the drop in Phoenix Group's long position.| JD Sports vs. Berkshire Hathaway | JD Sports vs. Hyundai Motor | JD Sports vs. Samsung Electronics Co | JD Sports vs. Samsung Electronics Co |
| Phoenix Group vs. Aberdeen Diversified Income | Phoenix Group vs. Herald Investment Trust | Phoenix Group vs. Mindflair Plc | Phoenix Group vs. Fair Oaks Income |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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