Correlation Between Ceconomy and JD Sports
Can any of the company-specific risk be diversified away by investing in both Ceconomy 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 Ceconomy and JD Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ceconomy AG ADR and JD Sports Fashion, you can compare the effects of market volatilities on Ceconomy 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 Ceconomy with a short position of JD Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ceconomy and JD Sports.
Diversification Opportunities for Ceconomy and JD Sports
Poor diversification
The 3 months correlation between Ceconomy and JDDSF is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Ceconomy AG ADR 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 Ceconomy 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 Ceconomy AG ADR 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 Ceconomy i.e., Ceconomy and JD Sports go up and down completely randomly.
Pair Corralation between Ceconomy and JD Sports
Assuming the 90 days horizon Ceconomy AG ADR is expected to generate 0.95 times more return on investment than JD Sports. However, Ceconomy AG ADR is 1.06 times less risky than JD Sports. It trades about -0.01 of its potential returns per unit of risk. JD Sports Fashion is currently generating about -0.24 per unit of risk. If you would invest 47.00 in Ceconomy AG ADR on October 23, 2024 and sell it today you would lose (1.00) from holding Ceconomy AG ADR or give up 2.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ceconomy AG ADR vs. JD Sports Fashion
Performance |
| Timeline |
| Ceconomy AG ADR |
| JD Sports Fashion |
Ceconomy and JD Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ceconomy and JD Sports
The main advantage of trading using opposite Ceconomy and JD Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ceconomy 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.| Ceconomy vs. AutoZone | Ceconomy vs. Advance Auto Parts | Ceconomy vs. Tractor Supply | Ceconomy vs. Genuine Parts 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |