Correlation Between JD Sports and PHINIA
Can any of the company-specific risk be diversified away by investing in both JD Sports and PHINIA 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 PHINIA 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 PHINIA Inc, you can compare the effects of market volatilities on JD Sports and PHINIA 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 PHINIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and PHINIA.
Diversification Opportunities for JD Sports and PHINIA
Very good diversification
The 3 months correlation between JDDSF and PHINIA is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and PHINIA Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHINIA Inc 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 PHINIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHINIA Inc has no effect on the direction of JD Sports i.e., JD Sports and PHINIA go up and down completely randomly.
Pair Corralation between JD Sports and PHINIA
Assuming the 90 days horizon JD Sports Fashion is expected to under-perform the PHINIA. In addition to that, JD Sports is 1.29 times more volatile than PHINIA Inc. It trades about 0.0 of its total potential returns per unit of risk. PHINIA Inc is currently generating about 0.12 per unit of volatility. If you would invest 2,910 in PHINIA Inc on September 14, 2024 and sell it today you would earn a total of 2,422 from holding PHINIA Inc or generate 83.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD Sports Fashion vs. PHINIA Inc
Performance |
| Timeline |
| JD Sports Fashion |
| PHINIA Inc |
JD Sports and PHINIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Sports and PHINIA
The main advantage of trading using opposite JD Sports and PHINIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports position performs unexpectedly, PHINIA 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 PHINIA will offset losses from the drop in PHINIA's long position.| JD Sports vs. Burlington Stores | JD Sports vs. Childrens Place | JD Sports vs. Buckle Inc | JD Sports vs. Shoe Carnival |
| PHINIA vs. FitLife Brands, Common | PHINIA vs. Kulicke and Soffa | PHINIA vs. Amkor Technology | PHINIA vs. NH Foods 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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