Correlation Between Shoe Carnival and JD Sports
Can any of the company-specific risk be diversified away by investing in both Shoe Carnival 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 Shoe Carnival and JD Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shoe Carnival and JD Sports Fashion, you can compare the effects of market volatilities on Shoe Carnival 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 Shoe Carnival with a short position of JD Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shoe Carnival and JD Sports.
Diversification Opportunities for Shoe Carnival and JD Sports
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shoe and JDSPY is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Shoe Carnival 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 Shoe Carnival 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 Shoe Carnival 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 Shoe Carnival i.e., Shoe Carnival and JD Sports go up and down completely randomly.
Pair Corralation between Shoe Carnival and JD Sports
Given the investment horizon of 90 days Shoe Carnival is expected to generate 0.7 times more return on investment than JD Sports. However, Shoe Carnival is 1.43 times less risky than JD Sports. It trades about -0.07 of its potential returns per unit of risk. JD Sports Fashion is currently generating about -0.12 per unit of risk. If you would invest 4,034 in Shoe Carnival on August 28, 2024 and sell it today you would lose (540.00) from holding Shoe Carnival or give up 13.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shoe Carnival vs. JD Sports Fashion
Performance |
| Timeline |
| Shoe Carnival |
| JD Sports Fashion |
Shoe Carnival and JD Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shoe Carnival and JD Sports
The main advantage of trading using opposite Shoe Carnival and JD Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shoe Carnival 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.| Shoe Carnival vs. Citi Trends | Shoe Carnival vs. Zumiez Inc | Shoe Carnival vs. Buckle Inc | Shoe Carnival vs. Cato Corporation |
| JD Sports vs. Burlington Stores | JD Sports vs. Childrens Place | JD Sports vs. Buckle Inc | JD Sports vs. Shoe Carnival |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |