Correlation Between JD Sports and ESH Acquisition
Can any of the company-specific risk be diversified away by investing in both JD Sports and ESH Acquisition 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 ESH Acquisition 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 ESH Acquisition Corp, you can compare the effects of market volatilities on JD Sports and ESH Acquisition 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 ESH Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and ESH Acquisition.
Diversification Opportunities for JD Sports and ESH Acquisition
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between JDDSF and ESH is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and ESH Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESH Acquisition Corp 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 ESH Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ESH Acquisition Corp has no effect on the direction of JD Sports i.e., JD Sports and ESH Acquisition go up and down completely randomly.
Pair Corralation between JD Sports and ESH Acquisition
Assuming the 90 days horizon JD Sports Fashion is expected to under-perform the ESH Acquisition. In addition to that, JD Sports is 11.4 times more volatile than ESH Acquisition Corp. It trades about -0.22 of its total potential returns per unit of risk. ESH Acquisition Corp is currently generating about 0.16 per unit of volatility. If you would invest 1,068 in ESH Acquisition Corp on September 13, 2024 and sell it today you would earn a total of 12.00 from holding ESH Acquisition Corp or generate 1.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD Sports Fashion vs. ESH Acquisition Corp
Performance |
| Timeline |
| JD Sports Fashion |
| ESH Acquisition Corp |
JD Sports and ESH Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Sports and ESH Acquisition
The main advantage of trading using opposite JD Sports and ESH Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports position performs unexpectedly, ESH Acquisition 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 ESH Acquisition will offset losses from the drop in ESH Acquisition's long position.The idea behind JD Sports Fashion and ESH Acquisition Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| ESH Acquisition vs. HE Equipment Services | ESH Acquisition vs. AmTrust Financial Services | ESH Acquisition vs. Barings BDC | ESH Acquisition vs. Univest Pennsylvania |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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