Correlation Between JD Sports and Black Hills
Can any of the company-specific risk be diversified away by investing in both JD Sports and Black Hills 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 Black Hills 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 Black Hills, you can compare the effects of market volatilities on JD Sports and Black Hills 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 Black Hills. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and Black Hills.
Diversification Opportunities for JD Sports and Black Hills
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between JDSPY and Black is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and Black Hills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Black Hills 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 Black Hills. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Black Hills has no effect on the direction of JD Sports i.e., JD Sports and Black Hills go up and down completely randomly.
Pair Corralation between JD Sports and Black Hills
Assuming the 90 days horizon JD Sports Fashion is expected to generate 3.23 times more return on investment than Black Hills. However, JD Sports is 3.23 times more volatile than Black Hills. It trades about 0.01 of its potential returns per unit of risk. Black Hills is currently generating about 0.01 per unit of risk. If you would invest 173.00 in JD Sports Fashion on September 3, 2024 and sell it today you would lose (43.00) from holding JD Sports Fashion or give up 24.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD Sports Fashion vs. Black Hills
Performance |
| Timeline |
| JD Sports Fashion |
| Black Hills |
JD Sports and Black Hills Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Sports and Black Hills
The main advantage of trading using opposite JD Sports and Black Hills positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports position performs unexpectedly, Black Hills 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 Black Hills will offset losses from the drop in Black Hills' long position.| JD Sports vs. Burlington Stores | JD Sports vs. Childrens Place | JD Sports vs. Buckle Inc | JD Sports vs. Shoe Carnival |
| Black Hills vs. NorthWestern | Black Hills vs. Avista | Black Hills vs. Otter Tail | Black Hills vs. Companhia Paranaense de |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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