Correlation Between Thor Mining and JD Sports
Can any of the company-specific risk be diversified away by investing in both Thor Mining 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 Thor Mining and JD Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thor Mining PLC and JD Sports Fashion, you can compare the effects of market volatilities on Thor Mining 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 Thor Mining with a short position of JD Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thor Mining and JD Sports.
Diversification Opportunities for Thor Mining and JD Sports
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Thor and JD Sports is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Thor Mining PLC 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 Thor Mining 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 Thor Mining PLC 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 Thor Mining i.e., Thor Mining and JD Sports go up and down completely randomly.
Pair Corralation between Thor Mining and JD Sports
Assuming the 90 days trading horizon Thor Mining PLC is expected to generate 0.87 times more return on investment than JD Sports. However, Thor Mining PLC is 1.15 times less risky than JD Sports. It trades about -0.17 of its potential returns per unit of risk. JD Sports Fashion is currently generating about -0.19 per unit of risk. If you would invest 85.00 in Thor Mining PLC on September 1, 2024 and sell it today you would lose (12.00) from holding Thor Mining PLC or give up 14.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thor Mining PLC vs. JD Sports Fashion
Performance |
| Timeline |
| Thor Mining PLC |
| JD Sports Fashion |
Thor Mining and JD Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thor Mining and JD Sports
The main advantage of trading using opposite Thor Mining and JD Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thor Mining 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.| Thor Mining vs. Givaudan SA | Thor Mining vs. Antofagasta PLC | Thor Mining vs. Centamin PLC | Thor Mining vs. Atalaya Mining |
| JD Sports vs. Toyota Motor Corp | JD Sports vs. SoftBank Group Corp | JD Sports vs. OTP Bank Nyrt | JD Sports vs. Las Vegas Sands |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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