Correlation Between Legacy Education and JD Sports

Can any of the company-specific risk be diversified away by investing in both Legacy Education and JD Sports 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 Legacy Education and JD Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Legacy Education Alliance and JD Sports Fashion, you can compare the effects of market volatilities on Legacy Education and JD Sports 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 Legacy Education with a short position of JD Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legacy Education and JD Sports.

Diversification Opportunities for Legacy Education and JD Sports

0.0

Correlation Coefficient

Legacy Education  JD Sports

Pay attention - limited upside

The 3 months correlation between Legacy and JDSPY is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Legacy Education Alliance and JD Sports Fashion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JD Sports Fashion and Legacy Education 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 Legacy Education Alliance are associated (or correlated) with JD Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JD Sports Fashion has no effect on the direction of Legacy Education i.e., Legacy Education and JD Sports go up and down completely randomly.

Pair Corralation between Legacy Education and JD Sports

If you would invest  101.00  in JD Sports Fashion on April 23, 2025 and sell it today you would earn a total of  15.00  from holding JD Sports Fashion or generate 14.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

Legacy Education Alliance  vs.  JD Sports Fashion

Legacy Education Alliance

Risk-Adjusted Performance

Very Weak

Over the last 90 days Legacy Education Alliance has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Legacy Education is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

JD Sports Fashion

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in JD Sports Fashion are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, JD Sports showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Legacy Education and JD Sports

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

The idea behind Legacy Education Alliance and JD Sports Fashion 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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.