Correlation Between JD Sports and Postal Realty

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

Diversification Opportunities for JD Sports and Postal Realty

0.54

Correlation Coefficient

JD Sports  Postal Realty

Very weak diversification

The 3 months correlation between JDDSF and Postal is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and Postal Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Postal Realty Trust 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 Postal Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Postal Realty Trust has no effect on the direction of JD Sports i.e., JD Sports and Postal Realty go up and down completely randomly.

Pair Corralation between JD Sports and Postal Realty

Assuming the 90 days horizon JD Sports Fashion is expected to generate 2.71 times more return on investment than Postal Realty. However, JD Sports is 2.71 times more volatile than Postal Realty Trust. It trades about 0.1 of its potential returns per unit of risk. Postal Realty Trust is currently generating about 0.13 per unit of risk. If you would invest  101.00  in JD Sports Fashion on May 15, 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	Weak
Accuracy	96.83%
Values	Daily Returns

JD Sports Fashion  vs.  Postal Realty Trust

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.

Postal Realty Trust

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Postal Realty Trust are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Postal Realty may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with JD Sports and Postal Realty

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

The idea behind JD Sports Fashion and Postal Realty Trust 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.