Correlation Between JD Sports and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both JD Sports and Samsung Electronics 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 Samsung Electronics 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 Samsung Electronics Co, you can compare the effects of market volatilities on JD Sports and Samsung Electronics 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 Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and Samsung Electronics.
Diversification Opportunities for JD Sports and Samsung Electronics
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between JD Sports and Samsung is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics 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 Samsung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Electronics has no effect on the direction of JD Sports i.e., JD Sports and Samsung Electronics go up and down completely randomly.
Pair Corralation between JD Sports and Samsung Electronics
Assuming the 90 days trading horizon JD Sports Fashion is expected to under-perform the Samsung Electronics. But the stock apears to be less risky and, when comparing its historical volatility, JD Sports Fashion is 1.14 times less risky than Samsung Electronics. The stock trades about -0.12 of its potential returns per unit of risk. The Samsung Electronics Co is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 126,400 in Samsung Electronics Co on August 20, 2025 and sell it today you would earn a total of 46,800 from holding Samsung Electronics Co or generate 37.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD Sports Fashion vs. Samsung Electronics Co
Performance |
| Timeline |
| JD Sports Fashion |
| Samsung Electronics |
JD Sports and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Sports and Samsung Electronics
The main advantage of trading using opposite JD Sports and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports position performs unexpectedly, Samsung Electronics 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 Samsung Electronics will offset losses from the drop in Samsung Electronics' long position.| JD Sports vs. Toyota Motor Corp | JD Sports vs. SoftBank Group Corp | JD Sports vs. Nintendo Co | JD Sports vs. Fannie Mae |
| Samsung Electronics vs. Verizon Communications | Samsung Electronics vs. Gamma Communications PLC | Samsung Electronics vs. Aeorema Communications Plc | Samsung Electronics vs. Alior Bank SA |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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