Correlation Between MOAB MINERALS and JD SPORTS

Can any of the company-specific risk be diversified away by investing in both MOAB MINERALS 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 MOAB MINERALS and JD SPORTS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MOAB MINERALS LTD and JD SPORTS FASH, you can compare the effects of market volatilities on MOAB MINERALS 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 MOAB MINERALS with a short position of JD SPORTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of MOAB MINERALS and JD SPORTS.

Diversification Opportunities for MOAB MINERALS and JD SPORTS

0.37

Correlation Coefficient

MOAB MINERALS  JD SPORTS

Weak diversification

The 3 months correlation between MOAB and 9JD is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding MOAB MINERALS LTD and JD SPORTS FASH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JD SPORTS FASH and MOAB MINERALS 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 MOAB MINERALS LTD 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 FASH has no effect on the direction of MOAB MINERALS i.e., MOAB MINERALS and JD SPORTS go up and down completely randomly.

Pair Corralation between MOAB MINERALS and JD SPORTS

Assuming the 90 days trading horizon MOAB MINERALS LTD is expected to generate 15.14 times more return on investment than JD SPORTS. However, MOAB MINERALS is 15.14 times more volatile than JD SPORTS FASH. It trades about 0.06 of its potential returns per unit of risk. JD SPORTS FASH is currently generating about 0.08 per unit of risk. If you would invest  0.10  in MOAB MINERALS LTD on September 24, 2024 and sell it today you would lose (0.05) from holding MOAB MINERALS LTD or give up 50.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

MOAB MINERALS LTD  vs.  JD SPORTS FASH

MOAB MINERALS LTD

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MOAB MINERALS LTD are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, MOAB MINERALS reported solid returns over the last few months and may actually be approaching a breakup point.

JD SPORTS FASH

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JD SPORTS FASH has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with MOAB MINERALS and JD SPORTS

The main advantage of trading using opposite MOAB MINERALS and JD SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MOAB MINERALS 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's long position.

The idea behind MOAB MINERALS LTD and JD SPORTS FASH 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.