Correlation Between JPMorgan Japanese and JD Sports
Can any of the company-specific risk be diversified away by investing in both JPMorgan Japanese and JD Sports 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 JPMorgan Japanese and JD Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JPMorgan Japanese Investment and JD Sports Fashion, you can compare the effects of market volatilities on JPMorgan Japanese and JD Sports 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 JPMorgan Japanese with a short position of JD Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Japanese and JD Sports.
Diversification Opportunities for JPMorgan Japanese and JD Sports
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between JPMorgan and JD Sports is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Japanese Investment and JD Sports Fashion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JD Sports Fashion and JPMorgan Japanese 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 JPMorgan Japanese Investment are associated (or correlated) with JD Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JD Sports Fashion has no effect on the direction of JPMorgan Japanese i.e., JPMorgan Japanese and JD Sports go up and down completely randomly.
Pair Corralation between JPMorgan Japanese and JD Sports
Assuming the 90 days trading horizon JPMorgan Japanese Investment is expected to generate 0.41 times more return on investment than JD Sports. However, JPMorgan Japanese Investment is 2.41 times less risky than JD Sports. It trades about 0.06 of its potential returns per unit of risk. JD Sports Fashion is currently generating about -0.05 per unit of risk. If you would invest 47,794 in JPMorgan Japanese Investment on September 12, 2024 and sell it today you would earn a total of 9,506 from holding JPMorgan Japanese Investment or generate 19.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
JPMorgan Japanese Investment vs. JD Sports Fashion
Performance |
| Timeline |
| JPMorgan Japanese |
| JD Sports Fashion |
JPMorgan Japanese and JD Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Japanese and JD Sports
The main advantage of trading using opposite JPMorgan Japanese and JD Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Japanese position performs unexpectedly, JD Sports 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 JD Sports will offset losses from the drop in JD Sports' long position.| JPMorgan Japanese vs. JD Sports Fashion | JPMorgan Japanese vs. Liberty Media Corp | JPMorgan Japanese vs. Catena Media PLC | JPMorgan Japanese vs. MediaZest plc |
| JD Sports vs. National Atomic Co | JD Sports vs. OTP Bank Nyrt | JD Sports vs. Samsung Electronics Co | JD Sports vs. Samsung Electronics Co |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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