Correlation Between JD Sports and Vodka Brands
Can any of the company-specific risk be diversified away by investing in both JD Sports and Vodka 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 Vodka 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 Vodka Brands Corp, you can compare the effects of market volatilities on JD Sports and Vodka 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 Vodka Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and Vodka Brands.
Diversification Opportunities for JD Sports and Vodka Brands
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JDSPY and Vodka is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and Vodka Brands Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vodka Brands Corp 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 Vodka Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vodka Brands Corp has no effect on the direction of JD Sports i.e., JD Sports and Vodka Brands go up and down completely randomly.
Pair Corralation between JD Sports and Vodka Brands
Assuming the 90 days horizon JD Sports Fashion is expected to under-perform the Vodka Brands. In addition to that, JD Sports is 2.19 times more volatile than Vodka Brands Corp. It trades about -0.06 of its total potential returns per unit of risk. Vodka Brands Corp is currently generating about 0.21 per unit of volatility. If you would invest 99.00 in Vodka Brands Corp on September 12, 2024 and sell it today you would earn a total of 13.00 from holding Vodka Brands Corp or generate 13.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
JD Sports Fashion vs. Vodka Brands Corp
Performance |
| Timeline |
| JD Sports Fashion |
| Vodka Brands Corp |
JD Sports and Vodka Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Sports and Vodka Brands
The main advantage of trading using opposite JD Sports and Vodka Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports position performs unexpectedly, Vodka 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 Vodka Brands will offset losses from the drop in Vodka Brands' long position.| JD Sports vs. Burlington Stores | JD Sports vs. Childrens Place | JD Sports vs. Buckle Inc | JD Sports vs. Shoe Carnival |
| Vodka Brands vs. Andrew Peller Limited | Vodka Brands vs. Aristocrat Group Corp | Vodka Brands vs. Iconic Brands | Vodka Brands vs. Naked Wines plc |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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