Correlation Between JD Sports and Alpha Technology

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

Diversification Opportunities for JD Sports and Alpha Technology

-0.52

Correlation Coefficient

JD Sports  Alpha Technology

Excellent diversification

The 3 months correlation between JDSPY and Alpha is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and Alpha Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Technology 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 Alpha Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha Technology has no effect on the direction of JD Sports i.e., JD Sports and Alpha Technology go up and down completely randomly.

Pair Corralation between JD Sports and Alpha Technology

Assuming the 90 days horizon JD Sports Fashion is expected to generate 0.96 times more return on investment than Alpha Technology. However, JD Sports Fashion is 1.05 times less risky than Alpha Technology. It trades about 0.03 of its potential returns per unit of risk. Alpha Technology Group is currently generating about -0.06 per unit of risk. If you would invest  113.00  in JD Sports Fashion on May 21, 2025 and sell it today you would earn a total of  3.00  from holding JD Sports Fashion or generate 2.65% return on investment over 90 days.

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

JD Sports Fashion  vs.  Alpha Technology Group

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 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, JD Sports may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Alpha Technology

Risk-Adjusted Performance

Weakest

Over the last 90 days Alpha Technology Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in September 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with JD Sports and Alpha Technology

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

The idea behind JD Sports Fashion and Alpha Technology Group 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.