Correlation Between United Guardian and JD Sports
Can any of the company-specific risk be diversified away by investing in both United Guardian 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 United Guardian and JD Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Guardian and JD Sports Fashion, you can compare the effects of market volatilities on United Guardian 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 United Guardian with a short position of JD Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Guardian and JD Sports.
Diversification Opportunities for United Guardian and JD Sports
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between United and JDSPY is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding United Guardian 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 United Guardian 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 United Guardian 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 United Guardian i.e., United Guardian and JD Sports go up and down completely randomly.
Pair Corralation between United Guardian and JD Sports
Allowing for the 90-day total investment horizon United Guardian is expected to under-perform the JD Sports. In addition to that, United Guardian is 1.09 times more volatile than JD Sports Fashion. It trades about -0.31 of its total potential returns per unit of risk. JD Sports Fashion is currently generating about -0.25 per unit of volatility. If you would invest 170.00 in JD Sports Fashion on August 24, 2024 and sell it today you would lose (30.00) from holding JD Sports Fashion or give up 17.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
United Guardian vs. JD Sports Fashion
Performance |
| Timeline |
| United Guardian |
| JD Sports Fashion |
United Guardian and JD Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Guardian and JD Sports
The main advantage of trading using opposite United Guardian and JD Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Guardian 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.| United Guardian vs. Utah Medical Products | United Guardian vs. Union Bankshares | United Guardian vs. Psychemedics | United Guardian vs. Unity Bancorp |
| 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 Stocks Directory module to find actively traded stocks across global markets.
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