Correlation Between JD Sports and XLMedia PLC
Can any of the company-specific risk be diversified away by investing in both JD Sports and XLMedia PLC 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 XLMedia PLC 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 XLMedia PLC, you can compare the effects of market volatilities on JD Sports and XLMedia PLC 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 XLMedia PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and XLMedia PLC.
Diversification Opportunities for JD Sports and XLMedia PLC
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between JD Sports and XLMedia is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and XLMedia PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XLMedia 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 XLMedia PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XLMedia PLC has no effect on the direction of JD Sports i.e., JD Sports and XLMedia PLC go up and down completely randomly.
Pair Corralation between JD Sports and XLMedia PLC
Assuming the 90 days trading horizon JD Sports Fashion is expected to under-perform the XLMedia PLC. In addition to that, JD Sports is 3.01 times more volatile than XLMedia PLC. It trades about -0.23 of its total potential returns per unit of risk. XLMedia PLC is currently generating about 0.03 per unit of volatility. If you would invest 1,175 in XLMedia PLC on August 30, 2024 and sell it today you would earn a total of 10.00 from holding XLMedia PLC or generate 0.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD Sports Fashion vs. XLMedia PLC
Performance |
| Timeline |
| JD Sports Fashion |
| XLMedia PLC |
JD Sports and XLMedia PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Sports and XLMedia PLC
The main advantage of trading using opposite JD Sports and XLMedia PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports position performs unexpectedly, XLMedia PLC 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 XLMedia PLC will offset losses from the drop in XLMedia PLC's long position.| JD Sports vs. Ondine Biomedical | JD Sports vs. Europa Metals | JD Sports vs. Lendinvest PLC | JD Sports vs. Neometals |
| XLMedia PLC vs. Walmart | XLMedia PLC vs. BYD Co | XLMedia PLC vs. Volkswagen AG | XLMedia PLC 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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