Correlation Between JD Sports and Ardagh
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By analyzing existing cross correlation between JD Sports Fashion and Ardagh Packaging Finance, you can compare the effects of market volatilities on JD Sports and Ardagh 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 Ardagh. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and Ardagh.
Diversification Opportunities for JD Sports and Ardagh
Very poor diversification
The 3 months correlation between JDSPY and Ardagh is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and Ardagh Packaging Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ardagh Packaging Finance 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 Ardagh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ardagh Packaging Finance has no effect on the direction of JD Sports i.e., JD Sports and Ardagh go up and down completely randomly.
Pair Corralation between JD Sports and Ardagh
Assuming the 90 days horizon JD Sports Fashion is expected to under-perform the Ardagh. But the pink sheet apears to be less risky and, when comparing its historical volatility, JD Sports Fashion is 1.62 times less risky than Ardagh. The pink sheet trades about -0.11 of its potential returns per unit of risk. The Ardagh Packaging Finance is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 8,448 in Ardagh Packaging Finance on September 12, 2024 and sell it today you would lose (848.00) from holding Ardagh Packaging Finance or give up 10.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 58.73% |
| Values | Daily Returns |
JD Sports Fashion vs. Ardagh Packaging Finance
Performance |
| Timeline |
| JD Sports Fashion |
| Ardagh Packaging Finance |
JD Sports and Ardagh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Sports and Ardagh
The main advantage of trading using opposite JD Sports and Ardagh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports position performs unexpectedly, Ardagh 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 Ardagh will offset losses from the drop in Ardagh's long position.| JD Sports vs. Burlington Stores | JD Sports vs. Childrens Place | JD Sports vs. Buckle Inc | JD Sports vs. Shoe Carnival |
| Ardagh vs. Old Republic International | Ardagh vs. Sonos Inc | Ardagh vs. Integrated Drilling Equipment | Ardagh vs. Aegon NV ADR |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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