Correlation Between JD Sports and Xylo Technologies
Can any of the company-specific risk be diversified away by investing in both JD Sports and Xylo Technologies 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 Xylo Technologies 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 Xylo Technologies, you can compare the effects of market volatilities on JD Sports and Xylo Technologies 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 Xylo Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and Xylo Technologies.
Diversification Opportunities for JD Sports and Xylo Technologies
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between JDSPY and Xylo is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and Xylo Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xylo Technologies 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 Xylo Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xylo Technologies has no effect on the direction of JD Sports i.e., JD Sports and Xylo Technologies go up and down completely randomly.
Pair Corralation between JD Sports and Xylo Technologies
Assuming the 90 days horizon JD Sports Fashion is expected to under-perform the Xylo Technologies. But the pink sheet apears to be less risky and, when comparing its historical volatility, JD Sports Fashion is 1.09 times less risky than Xylo Technologies. The pink sheet trades about -0.15 of its potential returns per unit of risk. The Xylo Technologies is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 307.00 in Xylo Technologies on September 3, 2024 and sell it today you would earn a total of 85.00 from holding Xylo Technologies or generate 27.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD Sports Fashion vs. Xylo Technologies
Performance |
| Timeline |
| JD Sports Fashion |
| Xylo Technologies |
JD Sports and Xylo Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Sports and Xylo Technologies
The main advantage of trading using opposite JD Sports and Xylo Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports position performs unexpectedly, Xylo Technologies 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 Xylo Technologies will offset losses from the drop in Xylo Technologies' long position.| JD Sports vs. Burlington Stores | JD Sports vs. Childrens Place | JD Sports vs. Buckle Inc | JD Sports vs. Shoe Carnival |
| Xylo Technologies vs. JD Sports Fashion | Xylo Technologies vs. Brunswick | Xylo Technologies vs. Canlan Ice Sports | Xylo Technologies vs. Snap On |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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