Correlation Between JD Sports and Hooker Furniture
Can any of the company-specific risk be diversified away by investing in both JD Sports and Hooker Furniture 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 Hooker Furniture 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 Hooker Furniture, you can compare the effects of market volatilities on JD Sports and Hooker Furniture 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 Hooker Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and Hooker Furniture.
Diversification Opportunities for JD Sports and Hooker Furniture
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JDSPY and Hooker is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and Hooker Furniture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hooker Furniture 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 Hooker Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hooker Furniture has no effect on the direction of JD Sports i.e., JD Sports and Hooker Furniture go up and down completely randomly.
Pair Corralation between JD Sports and Hooker Furniture
Assuming the 90 days horizon JD Sports Fashion is expected to generate 1.76 times more return on investment than Hooker Furniture. However, JD Sports is 1.76 times more volatile than Hooker Furniture. It trades about 0.02 of its potential returns per unit of risk. Hooker Furniture is currently generating about 0.02 per unit of risk. If you would invest 133.00 in JD Sports Fashion on August 30, 2024 and sell it today you would lose (5.00) from holding JD Sports Fashion or give up 3.76% 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. Hooker Furniture
Performance |
| Timeline |
| JD Sports Fashion |
| Hooker Furniture |
JD Sports and Hooker Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Sports and Hooker Furniture
The main advantage of trading using opposite JD Sports and Hooker Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports position performs unexpectedly, Hooker Furniture 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 Hooker Furniture will offset losses from the drop in Hooker Furniture's long position.| JD Sports vs. Burlington Stores | JD Sports vs. Childrens Place | JD Sports vs. Buckle Inc | JD Sports vs. Shoe Carnival |
| Hooker Furniture vs. Natuzzi SpA | Hooker Furniture vs. Flexsteel Industries | Hooker Furniture vs. Hamilton Beach Brands | Hooker Furniture vs. La Z Boy Incorporated |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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