Correlation Between JD Sports and Primo Brands
Can any of the company-specific risk be diversified away by investing in both JD Sports and Primo Brands 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 Primo Brands 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 Primo Brands, you can compare the effects of market volatilities on JD Sports and Primo Brands 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 Primo Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and Primo Brands.
Diversification Opportunities for JD Sports and Primo Brands
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between JDSPY and Primo is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and Primo Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Primo Brands 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 Primo Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Primo Brands has no effect on the direction of JD Sports i.e., JD Sports and Primo Brands go up and down completely randomly.
Pair Corralation between JD Sports and Primo Brands
Assuming the 90 days horizon JD Sports is expected to generate 51.47 times less return on investment than Primo Brands. In addition to that, JD Sports is 2.65 times more volatile than Primo Brands. It trades about 0.0 of its total potential returns per unit of risk. Primo Brands is currently generating about 0.11 per unit of volatility. If you would invest 1,382 in Primo Brands on October 13, 2024 and sell it today you would earn a total of 1,698 from holding Primo Brands or generate 122.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD Sports Fashion vs. Primo Brands
Performance |
| Timeline |
| JD Sports Fashion |
| Primo Brands |
JD Sports and Primo Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Sports and Primo Brands
The main advantage of trading using opposite JD Sports and Primo Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports position performs unexpectedly, Primo Brands 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 Primo Brands will offset losses from the drop in Primo Brands' long position.| JD Sports vs. Burlington Stores | JD Sports vs. Childrens Place | JD Sports vs. Buckle Inc | JD Sports vs. Shoe Carnival |
| Primo Brands vs. Asure Software | Primo Brands vs. Lipocine | Primo Brands vs. JD Sports Fashion | Primo Brands vs. Sonos Inc |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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