Correlation Between JD Sports and Sabien Technology
Can any of the company-specific risk be diversified away by investing in both JD Sports and Sabien Technology 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 Sabien Technology 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 Sabien Technology Group, you can compare the effects of market volatilities on JD Sports and Sabien Technology 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 Sabien Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and Sabien Technology.
Diversification Opportunities for JD Sports and Sabien Technology
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JD Sports and Sabien is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and Sabien Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabien Technology 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 Sabien Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabien Technology has no effect on the direction of JD Sports i.e., JD Sports and Sabien Technology go up and down completely randomly.
Pair Corralation between JD Sports and Sabien Technology
Assuming the 90 days trading horizon JD Sports Fashion is expected to under-perform the Sabien Technology. In addition to that, JD Sports is 1.41 times more volatile than Sabien Technology Group. It trades about -0.26 of its total potential returns per unit of risk. Sabien Technology Group is currently generating about -0.26 per unit of volatility. If you would invest 1,200 in Sabien Technology Group on August 29, 2024 and sell it today you would lose (200.00) from holding Sabien Technology Group or give up 16.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD Sports Fashion vs. Sabien Technology Group
Performance |
| Timeline |
| JD Sports Fashion |
| Sabien Technology |
JD Sports and Sabien Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Sports and Sabien Technology
The main advantage of trading using opposite JD Sports and Sabien Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports position performs unexpectedly, Sabien Technology 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 Sabien Technology will offset losses from the drop in Sabien Technology's long position.| JD Sports vs. Ondine Biomedical | JD Sports vs. Europa Metals | JD Sports vs. Lendinvest PLC | JD Sports vs. Neometals |
| Sabien Technology vs. Samsung Electronics Co | Sabien Technology vs. Samsung Electronics Co | Sabien Technology vs. Toyota Motor Corp | Sabien Technology vs. Reliance Industries Ltd |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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