Correlation Between JD Sports and Global Gas
Can any of the company-specific risk be diversified away by investing in both JD Sports and Global Gas 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 Global Gas 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 Global Gas, you can compare the effects of market volatilities on JD Sports and Global Gas 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 Global Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and Global Gas.
Diversification Opportunities for JD Sports and Global Gas
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between JDDSF and Global is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and Global Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Gas 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 Global Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Gas has no effect on the direction of JD Sports i.e., JD Sports and Global Gas go up and down completely randomly.
Pair Corralation between JD Sports and Global Gas
Assuming the 90 days horizon JD Sports Fashion is expected to generate 0.75 times more return on investment than Global Gas. However, JD Sports Fashion is 1.34 times less risky than Global Gas. It trades about 0.03 of its potential returns per unit of risk. Global Gas is currently generating about -0.1 per unit of risk. If you would invest 109.00 in JD Sports Fashion on September 2, 2024 and sell it today you would earn a total of 37.00 from holding JD Sports Fashion or generate 33.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 77.82% |
| Values | Daily Returns |
JD Sports Fashion vs. Global Gas
Performance |
| Timeline |
| JD Sports Fashion |
| Global Gas |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
JD Sports and Global Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Sports and Global Gas
The main advantage of trading using opposite JD Sports and Global Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports position performs unexpectedly, Global Gas 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 Global Gas will offset losses from the drop in Global Gas' long position.The idea behind JD Sports Fashion and Global Gas 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.| Global Gas vs. Saia Inc | Global Gas vs. Canlan Ice Sports | Global Gas vs. Udemy Inc | Global Gas vs. JD Sports Fashion |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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