Correlation Between ECARX Holdings and JD Sports

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

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

Diversification Opportunities for ECARX Holdings and JD Sports

0.2

Correlation Coefficient

ECARX Holdings  JD Sports

Modest diversification

The 3 months correlation between ECARX and JDSPY is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding ECARX Holdings Class 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 ECARX Holdings 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 ECARX Holdings Class 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 ECARX Holdings i.e., ECARX Holdings and JD Sports go up and down completely randomly.

Pair Corralation between ECARX Holdings and JD Sports

Considering the 90-day investment horizon ECARX Holdings Class is expected to generate 1.62 times more return on investment than JD Sports. However, ECARX Holdings is 1.62 times more volatile than JD Sports Fashion. It trades about 0.02 of its potential returns per unit of risk. JD Sports Fashion is currently generating about 0.02 per unit of risk. If you would invest  162.00  in ECARX Holdings Class on May 14, 2025 and sell it today you would lose (7.00) from holding ECARX Holdings Class or give up 4.32% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

ECARX Holdings Class  vs.  JD Sports Fashion

ECARX Holdings Class

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ECARX Holdings Class are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental indicators, ECARX Holdings may actually be approaching a critical reversion point that can send shares even higher in September 2025.

JD Sports Fashion

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in JD Sports Fashion are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, JD Sports is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ECARX Holdings and JD Sports

The main advantage of trading using opposite ECARX Holdings and JD Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECARX Holdings 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 ECARX Holdings Class 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.