Correlation Between Transport International and JD SPORTS
Can any of the company-specific risk be diversified away by investing in both Transport International 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 Transport International and JD SPORTS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transport International Holdings and JD SPORTS FASH, you can compare the effects of market volatilities on Transport International 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 Transport International with a short position of JD SPORTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transport International and JD SPORTS.
Diversification Opportunities for Transport International and JD SPORTS
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Transport and 9JD is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Transport International Holdin and JD SPORTS FASH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JD SPORTS FASH and Transport International 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 Transport International Holdings 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 FASH has no effect on the direction of Transport International i.e., Transport International and JD SPORTS go up and down completely randomly.
Pair Corralation between Transport International and JD SPORTS
Assuming the 90 days horizon Transport International Holdings is expected to generate 0.66 times more return on investment than JD SPORTS. However, Transport International Holdings is 1.51 times less risky than JD SPORTS. It trades about 0.01 of its potential returns per unit of risk. JD SPORTS FASH is currently generating about -0.38 per unit of risk. If you would invest 95.00 in Transport International Holdings on August 27, 2024 and sell it today you would earn a total of 0.00 from holding Transport International Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transport International Holdin vs. JD SPORTS FASH
Performance |
| Timeline |
| Transport International |
| JD SPORTS FASH |
Transport International and JD SPORTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transport International and JD SPORTS
The main advantage of trading using opposite Transport International and JD SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transport International 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's long position.| Transport International vs. FUYO GENERAL LEASE | Transport International vs. Global Ship Lease | Transport International vs. LION ONE METALS | Transport International vs. Evolution Mining Limited |
| JD SPORTS vs. AOYAMA TRADING | JD SPORTS vs. J JILL INC | JD SPORTS vs. Superior Plus Corp | JD SPORTS vs. NMI Holdings |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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