Correlation Between State Bank and JD Sports
Can any of the company-specific risk be diversified away by investing in both State Bank 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 State Bank and JD Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Bank of and JD Sports Fashion, you can compare the effects of market volatilities on State Bank 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 State Bank with a short position of JD Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Bank and JD Sports.
Diversification Opportunities for State Bank and JD Sports
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between State and JD Sports is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding State Bank of 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 State Bank 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 State Bank of 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 State Bank i.e., State Bank and JD Sports go up and down completely randomly.
Pair Corralation between State Bank and JD Sports
Assuming the 90 days trading horizon State Bank of is expected to generate 0.51 times more return on investment than JD Sports. However, State Bank of is 1.97 times less risky than JD Sports. It trades about -0.22 of its potential returns per unit of risk. JD Sports Fashion is currently generating about -0.15 per unit of risk. If you would invest 9,220 in State Bank of on October 29, 2024 and sell it today you would lose (630.00) from holding State Bank of or give up 6.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Bank of vs. JD Sports Fashion
Performance |
| Timeline |
| State Bank |
| JD Sports Fashion |
State Bank and JD Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Bank and JD Sports
The main advantage of trading using opposite State Bank and JD Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Bank 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.| State Bank vs. Gaztransport et Technigaz | State Bank vs. Pets at Home | State Bank vs. Trainline Plc | State Bank vs. Synthomer plc |
| JD Sports vs. Sealed Air Corp | JD Sports vs. Applied Materials | JD Sports vs. Delta Air Lines | JD Sports vs. Air Products Chemicals |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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