Correlation Between JD Sports and Chemours
Can any of the company-specific risk be diversified away by investing in both JD Sports and Chemours 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 Chemours 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 Chemours Co, you can compare the effects of market volatilities on JD Sports and Chemours 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 Chemours. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and Chemours.
Diversification Opportunities for JD Sports and Chemours
Very good diversification
The 3 months correlation between JDSPY and Chemours is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and Chemours Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chemours 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 Chemours. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chemours has no effect on the direction of JD Sports i.e., JD Sports and Chemours go up and down completely randomly.
Pair Corralation between JD Sports and Chemours
Assuming the 90 days horizon JD Sports Fashion is expected to generate 1.34 times more return on investment than Chemours. However, JD Sports is 1.34 times more volatile than Chemours Co. It trades about 0.01 of its potential returns per unit of risk. Chemours Co is currently generating about 0.0 per unit of risk. If you would invest 173.00 in JD Sports Fashion on September 2, 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. Chemours Co
Performance |
| Timeline |
| JD Sports Fashion |
| Chemours |
JD Sports and Chemours Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Sports and Chemours
The main advantage of trading using opposite JD Sports and Chemours positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports position performs unexpectedly, Chemours 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 Chemours will offset losses from the drop in Chemours' long position.| JD Sports vs. Ulta Beauty | JD Sports vs. Williams Sonoma | JD Sports vs. Dicks Sporting Goods | JD Sports vs. Best Buy Co |
| Chemours vs. Olin Corporation | Chemours vs. Cabot | Chemours vs. Kronos Worldwide | Chemours vs. LyondellBasell Industries NV |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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