Correlation Between JD Sports and Thor Mining
Can any of the company-specific risk be diversified away by investing in both JD Sports and Thor Mining 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 Thor Mining 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 Thor Mining PLC, you can compare the effects of market volatilities on JD Sports and Thor Mining 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 Thor Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and Thor Mining.
Diversification Opportunities for JD Sports and Thor Mining
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between JD Sports and Thor is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and Thor Mining PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thor Mining PLC 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 Thor Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thor Mining PLC has no effect on the direction of JD Sports i.e., JD Sports and Thor Mining go up and down completely randomly.
Pair Corralation between JD Sports and Thor Mining
Assuming the 90 days trading horizon JD Sports Fashion is expected to under-perform the Thor Mining. But the stock apears to be less risky and, when comparing its historical volatility, JD Sports Fashion is 1.37 times less risky than Thor Mining. The stock trades about -0.2 of its potential returns per unit of risk. The Thor Mining PLC is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 70.00 in Thor Mining PLC on November 5, 2024 and sell it today you would lose (5.00) from holding Thor Mining PLC or give up 7.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD Sports Fashion vs. Thor Mining PLC
Performance |
| Timeline |
| JD Sports Fashion |
| Thor Mining PLC |
JD Sports and Thor Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Sports and Thor Mining
The main advantage of trading using opposite JD Sports and Thor Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports position performs unexpectedly, Thor Mining 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 Thor Mining will offset losses from the drop in Thor Mining's long position.| JD Sports vs. National Atomic Co | JD Sports vs. Flutter Entertainment PLC | JD Sports vs. Ferguson Plc | JD Sports vs. Marwyn Value Investors |
| Thor Mining vs. Tatton Asset Management | Thor Mining vs. Scottish American Investment | Thor Mining vs. Bloomsbury Publishing Plc | Thor Mining vs. Herald Investment Trust |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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