Correlation Between JD Sports and China Conch

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

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

Diversification Opportunities for JD Sports and China Conch

0.56

Correlation Coefficient

JD Sports  China Conch

Very weak diversification

The 3 months correlation between JDDSF and China is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and China Conch Venture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Conch Venture and JD Sports 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 JD Sports Fashion are associated (or correlated) with China Conch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Conch Venture has no effect on the direction of JD Sports i.e., JD Sports and China Conch go up and down completely randomly.

Pair Corralation between JD Sports and China Conch

Assuming the 90 days horizon JD Sports is expected to generate 1.35 times less return on investment than China Conch. In addition to that, JD Sports is 1.11 times more volatile than China Conch Venture. It trades about 0.09 of its total potential returns per unit of risk. China Conch Venture is currently generating about 0.14 per unit of volatility. If you would invest  91.00  in China Conch Venture on May 19, 2025 and sell it today you would earn a total of  26.00  from holding China Conch Venture or generate 28.57% return on investment over 90 days.

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

JD Sports Fashion  vs.  China Conch Venture

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 weak basic indicators, JD Sports reported solid returns over the last few months and may actually be approaching a breakup point.

China Conch Venture

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in China Conch Venture are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, China Conch reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JD Sports and China Conch

The main advantage of trading using opposite JD Sports and China Conch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports position performs unexpectedly, China Conch 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 China Conch will offset losses from the drop in China Conch's long position.

The idea behind JD Sports Fashion and China Conch Venture 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.