Correlation Between PROG Holdings and JD Sports
Can any of the company-specific risk be diversified away by investing in both PROG Holdings 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 PROG Holdings and JD Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PROG Holdings and JD Sports Fashion, you can compare the effects of market volatilities on PROG Holdings 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 PROG Holdings with a short position of JD Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of PROG Holdings and JD Sports.
Diversification Opportunities for PROG Holdings and JD Sports
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PROG and JDDSF is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding PROG Holdings 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 PROG Holdings 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 PROG Holdings 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 PROG Holdings i.e., PROG Holdings and JD Sports go up and down completely randomly.
Pair Corralation between PROG Holdings and JD Sports
Considering the 90-day investment horizon PROG Holdings is expected to generate 2.99 times less return on investment than JD Sports. But when comparing it to its historical volatility, PROG Holdings is 3.14 times less risky than JD Sports. It trades about 0.13 of its potential returns per unit of risk. JD Sports Fashion is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 106.00 in JD Sports Fashion on April 14, 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 | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
PROG Holdings vs. JD Sports Fashion
Performance |
| Timeline |
| PROG Holdings |
| JD Sports Fashion |
PROG Holdings and JD Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PROG Holdings and JD Sports
The main advantage of trading using opposite PROG Holdings and JD Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PROG Holdings 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.| PROG Holdings vs. Alta Equipment Group | PROG Holdings vs. GATX Corporation | PROG Holdings vs. McGrath RentCorp | PROG Holdings vs. Adtalem Global Education |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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