Correlation Between ENTERPRISE and JD Sports

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

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

Diversification Opportunities for ENTERPRISE and JD Sports

-0.04

Correlation Coefficient

ENTERPRISE  JD Sports

Good diversification

The 3 months correlation between ENTERPRISE and JDSPY is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding ENTERPRISE PRODUCTS OPERATING 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 ENTERPRISE 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 ENTERPRISE PRODUCTS OPERATING 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 ENTERPRISE i.e., ENTERPRISE and JD Sports go up and down completely randomly.

Pair Corralation between ENTERPRISE and JD Sports

Assuming the 90 days trading horizon ENTERPRISE PRODUCTS OPERATING is expected to under-perform the JD Sports. But the bond apears to be less risky and, when comparing its historical volatility, ENTERPRISE PRODUCTS OPERATING is 2.96 times less risky than JD Sports. The bond trades about -0.05 of its potential returns per unit of risk. The JD Sports Fashion is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  116.00  in JD Sports Fashion on May 17, 2025 and sell it today you would earn a total of  2.00  from holding JD Sports Fashion or generate 1.72% return on investment over 90 days.

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

ENTERPRISE PRODUCTS OPERATING  vs.  JD Sports Fashion

ENTERPRISE PRODUCTS

Risk-Adjusted Performance

Weakest

Over the last 90 days ENTERPRISE PRODUCTS OPERATING has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, ENTERPRISE is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

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 conflicting basic indicators, JD Sports may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with ENTERPRISE and JD Sports

The main advantage of trading using opposite ENTERPRISE and JD Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENTERPRISE 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 ENTERPRISE PRODUCTS OPERATING 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.

Check out your portfolio center.

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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.