Correlation Between JD SPORTS and GERATHERM MEDICAL

Can any of the company-specific risk be diversified away by investing in both JD SPORTS and GERATHERM MEDICAL 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 GERATHERM MEDICAL 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 GERATHERM MEDICAL, you can compare the effects of market volatilities on JD SPORTS and GERATHERM MEDICAL 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 GERATHERM MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD SPORTS and GERATHERM MEDICAL.

Diversification Opportunities for JD SPORTS and GERATHERM MEDICAL

0.21

Correlation Coefficient

JD SPORTS  GERATHERM MEDICAL

Modest diversification

The 3 months correlation between 9JD and GERATHERM is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding JD SPORTS FASH and GERATHERM MEDICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GERATHERM MEDICAL 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 GERATHERM MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GERATHERM MEDICAL has no effect on the direction of JD SPORTS i.e., JD SPORTS and GERATHERM MEDICAL go up and down completely randomly.

Pair Corralation between JD SPORTS and GERATHERM MEDICAL

Assuming the 90 days horizon JD SPORTS FASH is expected to generate 1.01 times more return on investment than GERATHERM MEDICAL. However, JD SPORTS is 1.01 times more volatile than GERATHERM MEDICAL. It trades about 0.14 of its potential returns per unit of risk. GERATHERM MEDICAL is currently generating about 0.08 per unit of risk. If you would invest  84.00  in JD SPORTS FASH on April 16, 2025 and sell it today you would earn a total of  19.00  from holding JD SPORTS FASH or generate 22.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

JD SPORTS FASH  vs.  GERATHERM MEDICAL

JD SPORTS FASH

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JD SPORTS FASH are ranked lower than 10 (%) 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.

GERATHERM MEDICAL

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in GERATHERM MEDICAL are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, GERATHERM MEDICAL unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JD SPORTS and GERATHERM MEDICAL

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

The idea behind JD SPORTS FASH and GERATHERM MEDICAL 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.