Correlation Between Zegona Communications and JD Sports
Can any of the company-specific risk be diversified away by investing in both Zegona Communications 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 Zegona Communications and JD Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zegona Communications Plc and JD Sports Fashion, you can compare the effects of market volatilities on Zegona Communications 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 Zegona Communications with a short position of JD Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zegona Communications and JD Sports.
Diversification Opportunities for Zegona Communications and JD Sports
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Zegona and JD Sports is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Zegona Communications 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 Zegona Communications 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 Zegona Communications 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 Zegona Communications i.e., Zegona Communications and JD Sports go up and down completely randomly.
Pair Corralation between Zegona Communications and JD Sports
Assuming the 90 days trading horizon Zegona Communications Plc is expected to generate 0.58 times more return on investment than JD Sports. However, Zegona Communications Plc is 1.72 times less risky than JD Sports. It trades about 0.11 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 30,800 in Zegona Communications Plc on September 13, 2024 and sell it today you would earn a total of 1,600 from holding Zegona Communications Plc or generate 5.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zegona Communications Plc vs. JD Sports Fashion
Performance |
| Timeline |
| Zegona Communications Plc |
| JD Sports Fashion |
Zegona Communications and JD Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zegona Communications and JD Sports
The main advantage of trading using opposite Zegona Communications and JD Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zegona Communications 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.| Zegona Communications vs. Bloomsbury Publishing Plc | Zegona Communications vs. Solstad Offshore ASA | Zegona Communications vs. Vienna Insurance Group | Zegona Communications vs. Verizon Communications |
| JD Sports vs. Invesco Physical Silver | JD Sports vs. Beowulf Mining | JD Sports vs. Spirent Communications plc | JD Sports vs. Zoom Video Communications |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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