Correlation Between JD Sports and Revolve Group
Can any of the company-specific risk be diversified away by investing in both JD Sports and Revolve Group 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 Revolve Group 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 Revolve Group LLC, you can compare the effects of market volatilities on JD Sports and Revolve Group 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 Revolve Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and Revolve Group.
Diversification Opportunities for JD Sports and Revolve Group
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JDDSF and Revolve is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and Revolve Group LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Revolve Group LLC 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 Revolve Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Revolve Group LLC has no effect on the direction of JD Sports i.e., JD Sports and Revolve Group go up and down completely randomly.
Pair Corralation between JD Sports and Revolve Group
Assuming the 90 days horizon JD Sports Fashion is expected to under-perform the Revolve Group. But the pink sheet apears to be less risky and, when comparing its historical volatility, JD Sports Fashion is 1.5 times less risky than Revolve Group. The pink sheet trades about 0.0 of its potential returns per unit of risk. The Revolve Group LLC is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,861 in Revolve Group LLC on September 14, 2024 and sell it today you would earn a total of 1,856 from holding Revolve Group LLC or generate 99.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
JD Sports Fashion vs. Revolve Group LLC
Performance |
| Timeline |
| JD Sports Fashion |
| Revolve Group LLC |
JD Sports and Revolve Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Sports and Revolve Group
The main advantage of trading using opposite JD Sports and Revolve Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports position performs unexpectedly, Revolve Group 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 Revolve Group will offset losses from the drop in Revolve Group's long position.| JD Sports vs. Burlington Stores | JD Sports vs. Childrens Place | JD Sports vs. Buckle Inc | JD Sports vs. Shoe Carnival |
| Revolve Group vs. Capri Holdings | Revolve Group vs. Movado Group | Revolve Group vs. Tapestry | Revolve Group vs. Brilliant Earth Group |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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