Correlation Between JD Sports and FG Annuities
Can any of the company-specific risk be diversified away by investing in both JD Sports and FG Annuities 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 Annuities 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 Annuities Life, you can compare the effects of market volatilities on JD Sports and FG Annuities 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 Annuities. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and FG Annuities.
Diversification Opportunities for JD Sports and FG Annuities
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JDSPY and FGN is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and FG Annuities Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FG Annuities Life 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 Annuities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FG Annuities Life has no effect on the direction of JD Sports i.e., JD Sports and FG Annuities go up and down completely randomly.
Pair Corralation between JD Sports and FG Annuities
Assuming the 90 days horizon JD Sports Fashion is expected to under-perform the FG Annuities. In addition to that, JD Sports is 9.04 times more volatile than FG Annuities Life. It trades about -0.06 of its total potential returns per unit of risk. FG Annuities Life is currently generating about -0.11 per unit of volatility. If you would invest 2,731 in FG Annuities Life on September 12, 2024 and sell it today you would lose (43.00) from holding FG Annuities Life or give up 1.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD Sports Fashion vs. FG Annuities Life
Performance |
| Timeline |
| JD Sports Fashion |
| FG Annuities Life |
JD Sports and FG Annuities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Sports and FG Annuities
The main advantage of trading using opposite JD Sports and FG Annuities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports position performs unexpectedly, FG Annuities 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 Annuities will offset losses from the drop in FG Annuities' long position.| JD Sports vs. Burlington Stores | JD Sports vs. Childrens Place | JD Sports vs. Buckle Inc | JD Sports vs. Shoe Carnival |
| FG Annuities vs. Codexis | FG Annuities vs. Afya | FG Annuities vs. Origin Materials | FG Annuities vs. Ecovyst |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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