Correlation Between Catalyst Media and JD Sports

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

By analyzing existing cross correlation between Catalyst Media Group and JD Sports Fashion, you can compare the effects of market volatilities on Catalyst Media 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 Catalyst Media with a short position of JD Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Media and JD Sports.

Diversification Opportunities for Catalyst Media and JD Sports

0.31

Correlation Coefficient

Catalyst Media  JD Sports

Weak diversification

The 3 months correlation between Catalyst and JD Sports is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Media Group 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 Catalyst Media 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 Catalyst Media Group 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 Catalyst Media i.e., Catalyst Media and JD Sports go up and down completely randomly.

Pair Corralation between Catalyst Media and JD Sports

Assuming the 90 days trading horizon Catalyst Media is expected to generate 1.78 times less return on investment than JD Sports. But when comparing it to its historical volatility, Catalyst Media Group is 1.01 times less risky than JD Sports. It trades about 0.12 of its potential returns per unit of risk. JD Sports Fashion is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  6,316  in JD Sports Fashion on April 8, 2025 and sell it today you would earn a total of  2,688  from holding JD Sports Fashion or generate 42.56% return on investment over 90 days.

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

Catalyst Media Group  vs.  JD Sports Fashion

Catalyst Media Group

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Catalyst Media Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Catalyst Media exhibited solid returns over the last few months and may actually be approaching a breakup point.

JD Sports Fashion

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in JD Sports Fashion are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, JD Sports exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Catalyst Media and JD Sports

The main advantage of trading using opposite Catalyst Media and JD Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Media 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.

The idea behind Catalyst Media Group and JD Sports Fashion 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.

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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..