Correlation Between JD Sports and Valuence Merger
Can any of the company-specific risk be diversified away by investing in both JD Sports and Valuence Merger 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 Valuence Merger 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 Valuence Merger Corp, you can compare the effects of market volatilities on JD Sports and Valuence Merger 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 Valuence Merger. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and Valuence Merger.
Diversification Opportunities for JD Sports and Valuence Merger
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between JDSPY and Valuence is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and Valuence Merger Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valuence Merger 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 Valuence Merger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valuence Merger Corp has no effect on the direction of JD Sports i.e., JD Sports and Valuence Merger go up and down completely randomly.
Pair Corralation between JD Sports and Valuence Merger
Assuming the 90 days horizon JD Sports Fashion is expected to under-perform the Valuence Merger. In addition to that, JD Sports is 11.17 times more volatile than Valuence Merger Corp. It trades about -0.06 of its total potential returns per unit of risk. Valuence Merger Corp is currently generating about -0.25 per unit of volatility. If you would invest 1,180 in Valuence Merger Corp on September 12, 2024 and sell it today you would lose (36.00) from holding Valuence Merger Corp or give up 3.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
JD Sports Fashion vs. Valuence Merger Corp
Performance |
| Timeline |
| JD Sports Fashion |
| Valuence Merger Corp |
JD Sports and Valuence Merger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Sports and Valuence Merger
The main advantage of trading using opposite JD Sports and Valuence Merger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports position performs unexpectedly, Valuence Merger 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 Valuence Merger will offset losses from the drop in Valuence Merger's long position.| JD Sports vs. Burlington Stores | JD Sports vs. Childrens Place | JD Sports vs. Buckle Inc | JD Sports vs. Shoe Carnival |
| Valuence Merger vs. NETGEAR | Valuence Merger vs. Vishay Precision Group | Valuence Merger vs. Valens | Valuence Merger vs. Qualys 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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