Correlation Between Transport International and JD SPORTS

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

By analyzing existing cross correlation between Transport International Holdings and JD SPORTS FASH, you can compare the effects of market volatilities on Transport International 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 Transport International with a short position of JD SPORTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transport International and JD SPORTS.

Diversification Opportunities for Transport International and JD SPORTS

0.34

Correlation Coefficient

Transport International  JD SPORTS

Weak diversification

The 3 months correlation between Transport and 9JD is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Transport International Holdin and JD SPORTS FASH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JD SPORTS FASH and Transport International 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 Transport International 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 FASH has no effect on the direction of Transport International i.e., Transport International and JD SPORTS go up and down completely randomly.

Pair Corralation between Transport International and JD SPORTS

Assuming the 90 days horizon Transport International Holdings is expected to generate 1.26 times more return on investment than JD SPORTS. However, Transport International is 1.26 times more volatile than JD SPORTS FASH. It trades about 0.05 of its potential returns per unit of risk. JD SPORTS FASH is currently generating about 0.06 per unit of risk. If you would invest  85.00  in Transport International Holdings on April 23, 2025 and sell it today you would earn a total of  7.00  from holding Transport International Holdings or generate 8.24% return on investment over 90 days.

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

Transport International Holdin  vs.  JD SPORTS FASH

Transport International

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Transport International Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Transport International may actually be approaching a critical reversion point that can send shares even higher in August 2025.

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 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, JD SPORTS may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Transport International and JD SPORTS

The main advantage of trading using opposite Transport International and JD SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transport International 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's long position.

The idea behind Transport International Holdings and JD SPORTS FASH 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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.