Correlation Between Reliance Industries and JD Sports
Can any of the company-specific risk be diversified away by investing in both Reliance Industries 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 Reliance Industries and JD Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Reliance Industries Limited and JD Sports Fashion, you can compare the effects of market volatilities on Reliance Industries 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 Reliance Industries with a short position of JD Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reliance Industries and JD Sports.
Diversification Opportunities for Reliance Industries and JD Sports
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Reliance and JD Sports is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Reliance Industries Limited 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 Reliance Industries 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 Reliance Industries Limited 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 Reliance Industries i.e., Reliance Industries and JD Sports go up and down completely randomly.
Pair Corralation between Reliance Industries and JD Sports
Assuming the 90 days trading horizon Reliance Industries is expected to generate 2.58 times less return on investment than JD Sports. But when comparing it to its historical volatility, Reliance Industries Limited is 1.71 times less risky than JD Sports. It trades about 0.06 of its potential returns per unit of risk. JD Sports Fashion is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 9,086 in JD Sports Fashion on July 28, 2025 and sell it today you would earn a total of 984.00 from holding JD Sports Fashion or generate 10.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Reliance Industries Limited vs. JD Sports Fashion
Performance |
| Timeline |
| Reliance Industries |
| JD Sports Fashion |
Reliance Industries and JD Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reliance Industries and JD Sports
The main advantage of trading using opposite Reliance Industries and JD Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reliance Industries 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.| Reliance Industries vs. Auto Trader Group | Reliance Industries vs. British American Tobacco | Reliance Industries vs. Lowland Investment Co | Reliance Industries vs. Indutrade AB |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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