Correlation Between JD SPORTS and China Overseas

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

By analyzing existing cross correlation between JD SPORTS FASH and China Overseas Land, you can compare the effects of market volatilities on JD SPORTS and China Overseas 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 China Overseas. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD SPORTS and China Overseas.

Diversification Opportunities for JD SPORTS and China Overseas

-0.23

Correlation Coefficient

JD SPORTS  China Overseas

Very good diversification

The 3 months correlation between 9JD and China is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding JD SPORTS FASH and China Overseas Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Overseas Land 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 FASH are associated (or correlated) with China Overseas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Overseas Land has no effect on the direction of JD SPORTS i.e., JD SPORTS and China Overseas go up and down completely randomly.

Pair Corralation between JD SPORTS and China Overseas

Assuming the 90 days horizon JD SPORTS FASH is expected to generate 1.28 times more return on investment than China Overseas. However, JD SPORTS is 1.28 times more volatile than China Overseas Land. It trades about 0.08 of its potential returns per unit of risk. China Overseas Land is currently generating about -0.05 per unit of risk. If you would invest  85.00  in JD SPORTS FASH on April 22, 2025 and sell it today you would earn a total of  11.00  from holding JD SPORTS FASH or generate 12.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

JD SPORTS FASH  vs.  China Overseas Land

JD SPORTS FASH

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in JD SPORTS FASH are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, JD SPORTS reported solid returns over the last few months and may actually be approaching a breakup point.

China Overseas Land

Risk-Adjusted Performance

Very Weak

Over the last 90 days China Overseas Land has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with JD SPORTS and China Overseas

The main advantage of trading using opposite JD SPORTS and China Overseas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD SPORTS position performs unexpectedly, China Overseas 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 China Overseas will offset losses from the drop in China Overseas' long position.

The idea behind JD SPORTS FASH and China Overseas Land 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.

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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.