Correlation Between JD Sports and BOS Better
Can any of the company-specific risk be diversified away by investing in both JD Sports and BOS Better 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 BOS Better 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 BOS Better Online, you can compare the effects of market volatilities on JD Sports and BOS Better 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 BOS Better. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and BOS Better.
Diversification Opportunities for JD Sports and BOS Better
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between JDSPY and BOS is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and BOS Better Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOS Better Online 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 BOS Better. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOS Better Online has no effect on the direction of JD Sports i.e., JD Sports and BOS Better go up and down completely randomly.
Pair Corralation between JD Sports and BOS Better
Assuming the 90 days horizon JD Sports Fashion is expected to under-perform the BOS Better. In addition to that, JD Sports is 2.26 times more volatile than BOS Better Online. It trades about -0.04 of its total potential returns per unit of risk. BOS Better Online is currently generating about 0.09 per unit of volatility. If you would invest 282.00 in BOS Better Online on September 1, 2024 and sell it today you would earn a total of 57.00 from holding BOS Better Online or generate 20.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD Sports Fashion vs. BOS Better Online
Performance |
| Timeline |
| JD Sports Fashion |
| BOS Better Online |
JD Sports and BOS Better Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Sports and BOS Better
The main advantage of trading using opposite JD Sports and BOS Better positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports position performs unexpectedly, BOS Better 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 BOS Better will offset losses from the drop in BOS Better's long position.| JD Sports vs. Burlington Stores | JD Sports vs. Childrens Place | JD Sports vs. Buckle Inc | JD Sports vs. Shoe Carnival |
| BOS Better vs. Mynaric AG ADR | BOS Better vs. Knowles Cor | BOS Better vs. Comtech Telecommunications Corp | BOS Better vs. Ituran Location and |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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