Correlation Between Blue Moon and JD Sports

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

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

Diversification Opportunities for Blue Moon and JD Sports

-0.66

Correlation Coefficient

Blue Moon  JD Sports

Excellent diversification

The 3 months correlation between Blue and JDSPY is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Blue Moon Metals 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 Blue Moon 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 Blue Moon Metals 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 Blue Moon i.e., Blue Moon and JD Sports go up and down completely randomly.

Pair Corralation between Blue Moon and JD Sports

Assuming the 90 days horizon Blue Moon Metals is expected to generate 1.22 times more return on investment than JD Sports. However, Blue Moon is 1.22 times more volatile than JD Sports Fashion. It trades about 0.13 of its potential returns per unit of risk. JD Sports Fashion is currently generating about -0.04 per unit of risk. If you would invest  237.00  in Blue Moon Metals on September 13, 2025 and sell it today you would earn a total of  87.00  from holding Blue Moon Metals or generate 36.71% return on investment over 90 days.

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

Blue Moon Metals  vs.  JD Sports Fashion

Blue Moon Metals

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Blue Moon Metals are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Blue Moon reported solid returns over the last few months and may actually be approaching a breakup point.

JD Sports Fashion

Risk-Adjusted Performance

Weakest

Over the last 90 days JD Sports Fashion has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Blue Moon and JD Sports

The main advantage of trading using opposite Blue Moon and JD Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Moon 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 Blue Moon Metals 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.