Correlation Between Douglas Emmett and JD Sports

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

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

Diversification Opportunities for Douglas Emmett and JD Sports

0.79

Correlation Coefficient

Douglas Emmett  JD Sports

Poor diversification

The 3 months correlation between Douglas and JDDSF is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Douglas Emmett 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 Douglas Emmett 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 Douglas Emmett 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 Douglas Emmett i.e., Douglas Emmett and JD Sports go up and down completely randomly.

Pair Corralation between Douglas Emmett and JD Sports

Considering the 90-day investment horizon Douglas Emmett is expected to under-perform the JD Sports. But the stock apears to be less risky and, when comparing its historical volatility, Douglas Emmett is 2.04 times less risky than JD Sports. The stock trades about -0.01 of its potential returns per unit of risk. The JD Sports Fashion is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  101.00  in JD Sports Fashion on May 14, 2025 and sell it today you would earn a total of  19.00  from holding JD Sports Fashion or generate 18.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Douglas Emmett  vs.  JD Sports Fashion

Douglas Emmett

Risk-Adjusted Performance

Weakest

Over the last 90 days Douglas Emmett has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Douglas Emmett is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

JD Sports Fashion

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in JD Sports Fashion are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, JD Sports reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Douglas Emmett and JD Sports

The main advantage of trading using opposite Douglas Emmett and JD Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Douglas Emmett 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 Douglas Emmett 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.