Correlation Between JD Sports and GobiMin
Can any of the company-specific risk be diversified away by investing in both JD Sports and GobiMin 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 GobiMin 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 GobiMin, you can compare the effects of market volatilities on JD Sports and GobiMin 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 GobiMin. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and GobiMin.
Diversification Opportunities for JD Sports and GobiMin
Very good diversification
The 3 months correlation between JDSPY and GobiMin is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and GobiMin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GobiMin 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 GobiMin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GobiMin has no effect on the direction of JD Sports i.e., JD Sports and GobiMin go up and down completely randomly.
Pair Corralation between JD Sports and GobiMin
Assuming the 90 days horizon JD Sports Fashion is expected to generate 12.28 times more return on investment than GobiMin. However, JD Sports is 12.28 times more volatile than GobiMin. It trades about 0.01 of its potential returns per unit of risk. GobiMin is currently generating about 0.09 per unit of risk. If you would invest 153.00 in JD Sports Fashion on September 14, 2024 and sell it today you would lose (24.00) from holding JD Sports Fashion or give up 15.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 10.32% |
| Values | Daily Returns |
JD Sports Fashion vs. GobiMin
Performance |
| Timeline |
| JD Sports Fashion |
| GobiMin |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
JD Sports and GobiMin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Sports and GobiMin
The main advantage of trading using opposite JD Sports and GobiMin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports position performs unexpectedly, GobiMin 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 GobiMin will offset losses from the drop in GobiMin's long position.| JD Sports vs. Burlington Stores | JD Sports vs. Childrens Place | JD Sports vs. Buckle Inc | JD Sports vs. Shoe Carnival |
| GobiMin vs. Toro Co | GobiMin vs. Skechers USA | GobiMin vs. RBC Bearings Incorporated | GobiMin vs. Raytech Holding Limited |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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