Correlation Between JD Sports and FG Merger
Can any of the company-specific risk be diversified away by investing in both JD Sports and FG Merger 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 FG Merger 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 FG Merger Corp, you can compare the effects of market volatilities on JD Sports and FG Merger 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 FG Merger. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and FG Merger.
Diversification Opportunities for JD Sports and FG Merger
Average diversification
The 3 months correlation between JDSPY and FGMCW is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and FG Merger Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FG Merger Corp 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 FG Merger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FG Merger Corp has no effect on the direction of JD Sports i.e., JD Sports and FG Merger go up and down completely randomly.
Pair Corralation between JD Sports and FG Merger
Assuming the 90 days horizon JD Sports is expected to generate 121.26 times less return on investment than FG Merger. But when comparing it to its historical volatility, JD Sports Fashion is 10.28 times less risky than FG Merger. It trades about 0.01 of its potential returns per unit of risk. FG Merger Corp is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 5.00 in FG Merger Corp on September 12, 2024 and sell it today you would earn a total of 5.00 from holding FG Merger Corp or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 15.59% |
| Values | Daily Returns |
JD Sports Fashion vs. FG Merger Corp
Performance |
| Timeline |
| JD Sports Fashion |
| FG Merger Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
JD Sports and FG Merger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Sports and FG Merger
The main advantage of trading using opposite JD Sports and FG Merger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports position performs unexpectedly, FG Merger 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 FG Merger will offset losses from the drop in FG Merger's long position.| JD Sports vs. Burlington Stores | JD Sports vs. Childrens Place | JD Sports vs. Buckle Inc | JD Sports vs. Shoe Carnival |
| FG Merger vs. Western Digital | FG Merger vs. Meiwu Technology Co | FG Merger vs. Arrow Electronics | FG Merger vs. CTS Corporation |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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