Correlation Between Specialty Liquid and JD Sports

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

By analyzing existing cross correlation between Specialty Liquid Transportation and JD Sports Fashion, you can compare the effects of market volatilities on Specialty Liquid 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 Specialty Liquid with a short position of JD Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Specialty Liquid and JD Sports.

Diversification Opportunities for Specialty Liquid and JD Sports

0.0

Correlation Coefficient

Specialty Liquid  JD Sports

Pay attention - limited upside

The 3 months correlation between Specialty and JDDSF is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Specialty Liquid Transportatio 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 Specialty Liquid 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 Specialty Liquid Transportation 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 Specialty Liquid i.e., Specialty Liquid and JD Sports go up and down completely randomly.

Pair Corralation between Specialty Liquid and JD Sports

If you would invest  110.00  in JD Sports Fashion on January 25, 2024 and sell it today you would earn a total of  47.00  from holding JD Sports Fashion or generate 42.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	31.49%
Values	Daily Returns

Specialty Liquid Transportatio  vs.  JD Sports Fashion

Specialty Liquid Tra

Risk-Adjusted Performance

0 of 100

Very Weak

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

JD Sports Fashion

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JD Sports Fashion are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal basic indicators, JD Sports reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Specialty Liquid and JD Sports

The main advantage of trading using opposite Specialty Liquid and JD Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Specialty Liquid 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.

The idea behind Specialty Liquid Transportation and JD Sports Fashion 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.