Correlation Between JD Sports and Prosiebensat
Can any of the company-specific risk be diversified away by investing in both JD Sports and Prosiebensat 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 JD Sports and Prosiebensat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JD Sports Fashion and Prosiebensat 1 Media, you can compare the effects of market volatilities on JD Sports and Prosiebensat 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 JD Sports with a short position of Prosiebensat. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and Prosiebensat.
Diversification Opportunities for JD Sports and Prosiebensat
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JD Sports and Prosiebensat is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and Prosiebensat 1 Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prosiebensat 1 Media and JD Sports 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 JD Sports Fashion are associated (or correlated) with Prosiebensat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prosiebensat 1 Media has no effect on the direction of JD Sports i.e., JD Sports and Prosiebensat go up and down completely randomly.
Pair Corralation between JD Sports and Prosiebensat
Assuming the 90 days trading horizon JD Sports Fashion is expected to generate 1.08 times more return on investment than Prosiebensat. However, JD Sports is 1.08 times more volatile than Prosiebensat 1 Media. It trades about -0.02 of its potential returns per unit of risk. Prosiebensat 1 Media is currently generating about -0.03 per unit of risk. If you would invest 15,119 in JD Sports Fashion on September 9, 2024 and sell it today you would lose (4,654) from holding JD Sports Fashion or give up 30.78% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
JD Sports Fashion vs. Prosiebensat 1 Media
Performance |
Timeline |
JD Sports Fashion |
Prosiebensat 1 Media |
JD Sports and Prosiebensat Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with JD Sports and Prosiebensat
The main advantage of trading using opposite JD Sports and Prosiebensat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports position performs unexpectedly, Prosiebensat 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 Prosiebensat will offset losses from the drop in Prosiebensat's long position.JD Sports vs. Samsung Electronics Co | JD Sports vs. Samsung Electronics Co | JD Sports vs. Hyundai Motor | JD Sports vs. Toyota Motor Corp |
Prosiebensat vs. CleanTech Lithium plc | Prosiebensat vs. Endeavour Mining Corp | Prosiebensat vs. Anglesey Mining | Prosiebensat vs. Bisichi Mining PLC |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |