Correlation Between Nextplat Corp and JD Sports
Can any of the company-specific risk be diversified away by investing in both Nextplat Corp 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 Nextplat Corp and JD Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nextplat Corp and JD Sports Fashion, you can compare the effects of market volatilities on Nextplat Corp 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 Nextplat Corp with a short position of JD Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextplat Corp and JD Sports.
Diversification Opportunities for Nextplat Corp and JD Sports
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Nextplat and JDDSF is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Nextplat Corp 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 Nextplat Corp 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 Nextplat Corp 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 Nextplat Corp i.e., Nextplat Corp and JD Sports go up and down completely randomly.
Pair Corralation between Nextplat Corp and JD Sports
Given the investment horizon of 90 days Nextplat Corp is expected to under-perform the JD Sports. In addition to that, Nextplat Corp is 1.93 times more volatile than JD Sports Fashion. It trades about -0.19 of its total potential returns per unit of risk. JD Sports Fashion is currently generating about -0.21 per unit of volatility. If you would invest 177.00 in JD Sports Fashion on September 2, 2024 and sell it today you would lose (31.00) from holding JD Sports Fashion or give up 17.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nextplat Corp vs. JD Sports Fashion
Performance |
| Timeline |
| Nextplat Corp |
| JD Sports Fashion |
Nextplat Corp and JD Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nextplat Corp and JD Sports
The main advantage of trading using opposite Nextplat Corp and JD Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextplat Corp 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.| Nextplat Corp vs. Ke Holdings | Nextplat Corp vs. nCino Inc | Nextplat Corp vs. Kingsoft Cloud Holdings | Nextplat Corp vs. Jfrog |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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