Correlation Between JD Sports and Net Lease

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

Diversification Opportunities for JD Sports and Net Lease

0.7

Correlation Coefficient

JD Sports  Net Lease

Poor diversification

The 3 months correlation between JDDSF and Net is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and Net Lease Office in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Net Lease Office 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 Net Lease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Net Lease Office has no effect on the direction of JD Sports i.e., JD Sports and Net Lease go up and down completely randomly.

Pair Corralation between JD Sports and Net Lease

Assuming the 90 days horizon JD Sports Fashion is expected to generate 3.62 times more return on investment than Net Lease. However, JD Sports is 3.62 times more volatile than Net Lease Office. It trades about 0.1 of its potential returns per unit of risk. Net Lease Office is currently generating about 0.19 per unit of risk. If you would invest  101.00  in JD Sports Fashion on April 29, 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	96.88%
Values	Daily Returns

JD Sports Fashion  vs.  Net Lease Office

JD Sports Fashion

Risk-Adjusted Performance

OK

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.

Net Lease Office

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Net Lease Office are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, Net Lease may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with JD Sports and Net Lease

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

The idea behind JD Sports Fashion and Net Lease Office 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.