Correlation Between JD Sports and Canlan Ice
Can any of the company-specific risk be diversified away by investing in both JD Sports and Canlan Ice 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 Canlan Ice 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 Canlan Ice Sports, you can compare the effects of market volatilities on JD Sports and Canlan Ice 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 Canlan Ice. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and Canlan Ice.
Diversification Opportunities for JD Sports and Canlan Ice
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between JDDSF and Canlan is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and Canlan Ice Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canlan Ice Sports 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 Canlan Ice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canlan Ice Sports has no effect on the direction of JD Sports i.e., JD Sports and Canlan Ice go up and down completely randomly.
Pair Corralation between JD Sports and Canlan Ice
Assuming the 90 days horizon JD Sports Fashion is expected to generate 39.93 times more return on investment than Canlan Ice. However, JD Sports is 39.93 times more volatile than Canlan Ice Sports. It trades about 0.12 of its potential returns per unit of risk. Canlan Ice Sports is currently generating about 0.21 per unit of risk. If you would invest 106.00 in JD Sports Fashion on April 27, 2025 and sell it today you would earn a total of 14.00 from holding JD Sports Fashion or generate 13.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD Sports Fashion vs. Canlan Ice Sports
Performance |
| Timeline |
| JD Sports Fashion |
| Canlan Ice Sports |
JD Sports and Canlan Ice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Sports and Canlan Ice
The main advantage of trading using opposite JD Sports and Canlan Ice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports position performs unexpectedly, Canlan Ice 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 Canlan Ice will offset losses from the drop in Canlan Ice's long position.The idea behind JD Sports Fashion and Canlan Ice Sports 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.| Canlan Ice vs. Yuexiu Transport Infrastructure | Canlan Ice vs. Aluminum of | Canlan Ice vs. Austin Gold Corp | Canlan Ice vs. Astral Foods Limited |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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