Correlation Between JD Sports and BPCEGP

Can any of the company-specific risk be diversified away by investing in both JD Sports and BPCEGP 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 BPCEGP 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 BPCEGP 1652 06 OCT 26, you can compare the effects of market volatilities on JD Sports and BPCEGP 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 BPCEGP. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and BPCEGP.

Diversification Opportunities for JD Sports and BPCEGP

0.52

Correlation Coefficient

JD Sports  BPCEGP

Very weak diversification

The 3 months correlation between JDDSF and BPCEGP is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and BPCEGP 1652 06 OCT 26 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BPCEGP 1652 06 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 BPCEGP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BPCEGP 1652 06 has no effect on the direction of JD Sports i.e., JD Sports and BPCEGP go up and down completely randomly.

Pair Corralation between JD Sports and BPCEGP

Assuming the 90 days horizon JD Sports Fashion is expected to under-perform the BPCEGP. In addition to that, JD Sports is 6.08 times more volatile than BPCEGP 1652 06 OCT 26. It trades about -0.04 of its total potential returns per unit of risk. BPCEGP 1652 06 OCT 26 is currently generating about -0.11 per unit of volatility. If you would invest  9,640  in BPCEGP 1652 06 OCT 26 on August 31, 2024 and sell it today you would lose (213.00) from holding BPCEGP 1652 06 OCT 26 or give up 2.21% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	73.02%
Values	Daily Returns

JD Sports Fashion  vs.  BPCEGP 1652 06 OCT 26

JD Sports Fashion

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JD Sports Fashion has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, JD Sports is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

BPCEGP 1652 06

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BPCEGP 1652 06 OCT 26 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, BPCEGP is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with JD Sports and BPCEGP

The main advantage of trading using opposite JD Sports and BPCEGP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports position performs unexpectedly, BPCEGP 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 BPCEGP will offset losses from the drop in BPCEGP's long position.

The idea behind JD Sports Fashion and BPCEGP 1652 06 OCT 26 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.