Correlation Between Natural Health and JD SPORTS
Can any of the company-specific risk be diversified away by investing in both Natural Health 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 Natural Health and JD SPORTS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natural Health Trends and JD SPORTS FASH, you can compare the effects of market volatilities on Natural Health 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 Natural Health with a short position of JD SPORTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natural Health and JD SPORTS.
Diversification Opportunities for Natural Health and JD SPORTS
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Natural and 9JD is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Natural Health Trends 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 Natural Health 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 Natural Health Trends 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 Natural Health i.e., Natural Health and JD SPORTS go up and down completely randomly.
Pair Corralation between Natural Health and JD SPORTS
Assuming the 90 days trading horizon Natural Health Trends is expected to generate 0.68 times more return on investment than JD SPORTS. However, Natural Health Trends is 1.46 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 -0.17 per unit of risk. If you would invest 517.00 in Natural Health Trends on September 5, 2024 and sell it today you would lose (7.00) from holding Natural Health Trends or give up 1.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Natural Health Trends vs. JD SPORTS FASH
Performance |
| Timeline |
| Natural Health Trends |
| JD SPORTS FASH |
Natural Health and JD SPORTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natural Health and JD SPORTS
The main advantage of trading using opposite Natural Health and JD SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natural Health 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.| Natural Health vs. ANGLER GAMING PLC | Natural Health vs. Hochschild Mining plc | Natural Health vs. HOCHSCHILD MINING | Natural Health vs. OURGAME INTHOLDL 00005 |
| JD SPORTS vs. RYU Apparel | JD SPORTS vs. Titan Machinery | JD SPORTS vs. Granite Construction | JD SPORTS vs. AM EAGLE OUTFITTERS |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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