Correlation Between JD Sports and Stratasys
Can any of the company-specific risk be diversified away by investing in both JD Sports and Stratasys 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 Stratasys 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 Stratasys, you can compare the effects of market volatilities on JD Sports and Stratasys 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 Stratasys. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and Stratasys.
Diversification Opportunities for JD Sports and Stratasys
Very good diversification
The 3 months correlation between JDDSF and Stratasys is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and Stratasys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stratasys 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 Stratasys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stratasys has no effect on the direction of JD Sports i.e., JD Sports and Stratasys go up and down completely randomly.
Pair Corralation between JD Sports and Stratasys
Assuming the 90 days horizon JD Sports Fashion is expected to generate 0.64 times more return on investment than Stratasys. However, JD Sports Fashion is 1.57 times less risky than Stratasys. It trades about 0.03 of its potential returns per unit of risk. Stratasys is currently generating about 0.01 per unit of risk. If you would invest 139.00 in JD Sports Fashion on September 3, 2024 and sell it today you would earn a total of 7.00 from holding JD Sports Fashion or generate 5.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD Sports Fashion vs. Stratasys
Performance |
| Timeline |
| JD Sports Fashion |
| Stratasys |
JD Sports and Stratasys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Sports and Stratasys
The main advantage of trading using opposite JD Sports and Stratasys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports position performs unexpectedly, Stratasys 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 Stratasys will offset losses from the drop in Stratasys' long position.| JD Sports vs. Guess Inc | JD Sports vs. Foot Locker | JD Sports vs. JPMorgan Chase Co | JD Sports vs. Home Depot |
| Stratasys vs. Nano Dimension | Stratasys vs. IONQ Inc | Stratasys vs. D Wave Quantum | Stratasys vs. Desktop Metal |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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