Correlation Between JD Sports and Semilux International
Can any of the company-specific risk be diversified away by investing in both JD Sports and Semilux International 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 Semilux International 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 Semilux International Ltd, you can compare the effects of market volatilities on JD Sports and Semilux International 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 Semilux International. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and Semilux International.
Diversification Opportunities for JD Sports and Semilux International
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between JDDSF and Semilux is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and Semilux International Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semilux International 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 Semilux International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semilux International has no effect on the direction of JD Sports i.e., JD Sports and Semilux International go up and down completely randomly.
Pair Corralation between JD Sports and Semilux International
Assuming the 90 days horizon JD Sports Fashion is expected to generate 0.64 times more return on investment than Semilux International. However, JD Sports Fashion is 1.57 times less risky than Semilux International. It trades about 0.03 of its potential returns per unit of risk. Semilux International Ltd is currently generating about -0.01 per unit of risk. If you would invest 109.00 in JD Sports Fashion on September 14, 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD Sports Fashion vs. Semilux International Ltd
Performance |
| Timeline |
| JD Sports Fashion |
| Semilux International |
JD Sports and Semilux International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Sports and Semilux International
The main advantage of trading using opposite JD Sports and Semilux International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports position performs unexpectedly, Semilux International 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 Semilux International will offset losses from the drop in Semilux International's long position.| JD Sports vs. Burlington Stores | JD Sports vs. Childrens Place | JD Sports vs. Buckle Inc | JD Sports vs. Shoe Carnival |
| Semilux International vs. Verra Mobility Corp | Semilux International vs. Eastman Kodak Co | Semilux International vs. Iridium Communications | Semilux International 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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