Correlation Between JD Sports and PHLX Swiss
Can any of the company-specific risk be diversified away by investing in both JD Sports and PHLX Swiss 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 PHLX Swiss 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 PHLX Swiss Franc, you can compare the effects of market volatilities on JD Sports and PHLX Swiss 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 PHLX Swiss. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and PHLX Swiss.
Diversification Opportunities for JD Sports and PHLX Swiss
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between JDSPY and PHLX is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and PHLX Swiss Franc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHLX Swiss Franc 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 PHLX Swiss. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHLX Swiss Franc has no effect on the direction of JD Sports i.e., JD Sports and PHLX Swiss go up and down completely randomly.
Pair Corralation between JD Sports and PHLX Swiss
Assuming the 90 days horizon JD Sports Fashion is expected to under-perform the PHLX Swiss. In addition to that, JD Sports is 8.91 times more volatile than PHLX Swiss Franc. It trades about -0.03 of its total potential returns per unit of risk. PHLX Swiss Franc is currently generating about -0.01 per unit of volatility. If you would invest 11,383 in PHLX Swiss Franc on September 4, 2024 and sell it today you would lose (99.00) from holding PHLX Swiss Franc or give up 0.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.2% |
| Values | Daily Returns |
JD Sports Fashion vs. PHLX Swiss Franc
Performance |
| Timeline |
JD Sports and PHLX Swiss Volatility Contrast
Predicted Return Density |
| Returns |
JD Sports Fashion
Pair trading matchups for JD Sports
PHLX Swiss Franc
Pair trading matchups for PHLX Swiss
Pair Trading with JD Sports and PHLX Swiss
The main advantage of trading using opposite JD Sports and PHLX Swiss positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports position performs unexpectedly, PHLX Swiss 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 PHLX Swiss will offset losses from the drop in PHLX Swiss' long position.| JD Sports vs. Guess Inc | JD Sports vs. Foot Locker | JD Sports vs. JPMorgan Chase Co | JD Sports vs. Home Depot |
| PHLX Swiss vs. Air Products and | PHLX Swiss vs. Stepan Company | PHLX Swiss vs. Mativ Holdings | PHLX Swiss vs. JD Sports Fashion |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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