Correlation Between JD Sports and Denison Mines

Can any of the company-specific risk be diversified away by investing in both JD Sports and Denison Mines 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 Denison Mines 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 Denison Mines Corp, you can compare the effects of market volatilities on JD Sports and Denison Mines 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 Denison Mines. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and Denison Mines.

Diversification Opportunities for JD Sports and Denison Mines

0.58

Correlation Coefficient

JD Sports  Denison Mines

Very weak diversification

The 3 months correlation between JDDSF and Denison is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and Denison Mines Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Denison Mines Corp 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 Denison Mines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Denison Mines Corp has no effect on the direction of JD Sports i.e., JD Sports and Denison Mines go up and down completely randomly.

Pair Corralation between JD Sports and Denison Mines

Assuming the 90 days horizon JD Sports is expected to generate 1.92 times less return on investment than Denison Mines. But when comparing it to its historical volatility, JD Sports Fashion is 1.2 times less risky than Denison Mines. It trades about 0.1 of its potential returns per unit of risk. Denison Mines Corp is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  152.00  in Denison Mines Corp on May 13, 2025 and sell it today you would earn a total of  60.00  from holding Denison Mines Corp or generate 39.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.88%
Values	Daily Returns

JD Sports Fashion  vs.  Denison Mines Corp

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.

Denison Mines Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Denison Mines Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very sluggish basic indicators, Denison Mines displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JD Sports and Denison Mines

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

The idea behind JD Sports Fashion and Denison Mines Corp 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.