Correlation Between JD Sports and U-Haul Holding
Can any of the company-specific risk be diversified away by investing in both JD Sports and U-Haul Holding 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 U-Haul Holding 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 U Haul Holding, you can compare the effects of market volatilities on JD Sports and U-Haul Holding 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 U-Haul Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and U-Haul Holding.
Diversification Opportunities for JD Sports and U-Haul Holding
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between JDSPY and U-Haul is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and U Haul Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on U Haul Holding 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 U-Haul Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of U Haul Holding has no effect on the direction of JD Sports i.e., JD Sports and U-Haul Holding go up and down completely randomly.
Pair Corralation between JD Sports and U-Haul Holding
Assuming the 90 days horizon JD Sports Fashion is expected to under-perform the U-Haul Holding. In addition to that, JD Sports is 3.56 times more volatile than U Haul Holding. It trades about -0.18 of its total potential returns per unit of risk. U Haul Holding is currently generating about -0.21 per unit of volatility. If you would invest 6,850 in U Haul Holding on August 31, 2024 and sell it today you would lose (517.00) from holding U Haul Holding or give up 7.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD Sports Fashion vs. U Haul Holding
Performance |
| Timeline |
| JD Sports Fashion |
| U Haul Holding |
JD Sports and U-Haul Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Sports and U-Haul Holding
The main advantage of trading using opposite JD Sports and U-Haul Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports position performs unexpectedly, U-Haul Holding 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 U-Haul Holding will offset losses from the drop in U-Haul Holding's long position.| JD Sports vs. Burlington Stores | JD Sports vs. Childrens Place | JD Sports vs. Buckle Inc | JD Sports vs. Shoe Carnival |
| U-Haul Holding vs. Alvotech | U-Haul Holding vs. Triton International Limited | U-Haul Holding vs. Vindicator Silver Lead Mining | U-Haul Holding vs. BioNTech SE |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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