Correlation Between Xylo Technologies and JD Sports
Can any of the company-specific risk be diversified away by investing in both Xylo Technologies 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 Xylo Technologies and JD Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xylo Technologies and JD Sports Fashion, you can compare the effects of market volatilities on Xylo Technologies 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 Xylo Technologies with a short position of JD Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xylo Technologies and JD Sports.
Diversification Opportunities for Xylo Technologies and JD Sports
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Xylo and JDSPY is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Xylo Technologies 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 Xylo Technologies 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 Xylo Technologies 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 Xylo Technologies i.e., Xylo Technologies and JD Sports go up and down completely randomly.
Pair Corralation between Xylo Technologies and JD Sports
Given the investment horizon of 90 days Xylo Technologies is expected to under-perform the JD Sports. In addition to that, Xylo Technologies is 1.2 times more volatile than JD Sports Fashion. It trades about -0.02 of its total potential returns per unit of risk. JD Sports Fashion is currently generating about 0.01 per unit of volatility. If you would invest 173.00 in JD Sports Fashion on September 3, 2024 and sell it today you would lose (43.00) from holding JD Sports Fashion or give up 24.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xylo Technologies vs. JD Sports Fashion
Performance |
| Timeline |
| Xylo Technologies |
| JD Sports Fashion |
Xylo Technologies and JD Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xylo Technologies and JD Sports
The main advantage of trading using opposite Xylo Technologies and JD Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xylo Technologies 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.| Xylo Technologies vs. JD Sports Fashion | Xylo Technologies vs. Brunswick | Xylo Technologies vs. Canlan Ice Sports | Xylo Technologies vs. Snap On |
| 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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