Correlation Between JD Sports and Radcom

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

Diversification Opportunities for JD Sports and Radcom

0.63

Correlation Coefficient

JD Sports  Radcom

Poor diversification

The 3 months correlation between JDSPY and Radcom is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and Radcom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radcom 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 Radcom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Radcom has no effect on the direction of JD Sports i.e., JD Sports and Radcom go up and down completely randomly.

Pair Corralation between JD Sports and Radcom

Assuming the 90 days horizon JD Sports Fashion is expected to generate 1.24 times more return on investment than Radcom. However, JD Sports is 1.24 times more volatile than Radcom. It trades about 0.05 of its potential returns per unit of risk. Radcom is currently generating about 0.03 per unit of risk. If you would invest  113.00  in JD Sports Fashion on May 26, 2025 and sell it today you would earn a total of  8.00  from holding JD Sports Fashion or generate 7.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

JD Sports Fashion  vs.  Radcom

JD Sports Fashion

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in JD Sports Fashion are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, JD Sports may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Radcom

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Radcom are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Radcom is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with JD Sports and Radcom

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

The idea behind JD Sports Fashion and Radcom 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.