Correlation Between JD Sports and Contextlogic

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

Diversification Opportunities for JD Sports and Contextlogic

0.03

Correlation Coefficient

JD Sports  Contextlogic

Significant diversification

The 3 months correlation between JDSPY and Contextlogic is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and Contextlogic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Contextlogic 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 Contextlogic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Contextlogic has no effect on the direction of JD Sports i.e., JD Sports and Contextlogic go up and down completely randomly.

Pair Corralation between JD Sports and Contextlogic

Assuming the 90 days horizon JD Sports Fashion is expected to generate 0.96 times more return on investment than Contextlogic. However, JD Sports Fashion is 1.04 times less risky than Contextlogic. It trades about 0.11 of its potential returns per unit of risk. Contextlogic is currently generating about 0.04 per unit of risk. If you would invest  101.00  in JD Sports Fashion on April 30, 2025 and sell it today you would earn a total of  23.00  from holding JD Sports Fashion or generate 22.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	60.66%
Values	Daily Returns

JD Sports Fashion  vs.  Contextlogic

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 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, JD Sports showed solid returns over the last few months and may actually be approaching a breakup point.

Contextlogic

Risk-Adjusted Performance

Insignificant

Over the last 90 days Contextlogic has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather unfluctuating technical and fundamental indicators, Contextlogic may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with JD Sports and Contextlogic

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

The idea behind JD Sports Fashion and Contextlogic 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .