Correlation Between Lion One and JD Sports
Can any of the company-specific risk be diversified away by investing in both Lion One 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 Lion One and JD Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion One Metals and JD Sports Fashion, you can compare the effects of market volatilities on Lion One 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 Lion One with a short position of JD Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and JD Sports.
Diversification Opportunities for Lion One and JD Sports
Weak diversification
The 3 months correlation between Lion and JDSPY is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals 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 Lion One 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 Lion One Metals 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 Lion One i.e., Lion One and JD Sports go up and down completely randomly.
Pair Corralation between Lion One and JD Sports
Assuming the 90 days horizon Lion One Metals is expected to generate 2.07 times more return on investment than JD Sports. However, Lion One is 2.07 times more volatile than JD Sports Fashion. It trades about 0.3 of its potential returns per unit of risk. JD Sports Fashion is currently generating about -0.11 per unit of risk. If you would invest 19.00 in Lion One Metals on November 3, 2024 and sell it today you would earn a total of 8.00 from holding Lion One Metals or generate 42.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Lion One Metals vs. JD Sports Fashion
Performance |
| Timeline |
| Lion One Metals |
| JD Sports Fashion |
Lion One and JD Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and JD Sports
The main advantage of trading using opposite Lion One and JD Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One 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.| Lion One vs. Irving Resources | Lion One vs. Headwater Gold | Lion One vs. Novo Resources Corp | Lion One vs. Snowline Gold Corp |
| JD Sports vs. Ulta Beauty | JD Sports vs. Williams Sonoma | JD Sports vs. Dicks Sporting Goods | JD Sports vs. Best Buy 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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