Correlation Between Academy Sports and Advanced Micro
Can any of the company-specific risk be diversified away by investing in both Academy Sports and Advanced Micro 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 Academy Sports and Advanced Micro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Academy Sports and and Advanced Micro Devices, you can compare the effects of market volatilities on Academy Sports and Advanced Micro 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 Academy Sports with a short position of Advanced Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Academy Sports and Advanced Micro.
Diversification Opportunities for Academy Sports and Advanced Micro
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Academy and Advanced is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Academy Sports and and Advanced Micro Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Micro Devices and Academy 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 Academy Sports and are associated (or correlated) with Advanced Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Micro Devices has no effect on the direction of Academy Sports i.e., Academy Sports and Advanced Micro go up and down completely randomly.
Pair Corralation between Academy Sports and Advanced Micro
Assuming the 90 days trading horizon Academy Sports and is expected to generate 0.17 times more return on investment than Advanced Micro. However, Academy Sports and is 5.83 times less risky than Advanced Micro. It trades about -0.34 of its potential returns per unit of risk. Advanced Micro Devices is currently generating about -0.14 per unit of risk. If you would invest 8,640 in Academy Sports and on November 3, 2024 and sell it today you would lose (248.00) from holding Academy Sports and or give up 2.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 78.26% |
| Values | Daily Returns |
Academy Sports and vs. Advanced Micro Devices
Performance |
| Timeline |
| Academy Sports |
| Advanced Micro Devices |
Academy Sports and Advanced Micro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Academy Sports and Advanced Micro
The main advantage of trading using opposite Academy Sports and Advanced Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Academy Sports position performs unexpectedly, Advanced Micro 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 Advanced Micro will offset losses from the drop in Advanced Micro's long position.| Academy Sports vs. Spotify Technology SA | Academy Sports vs. KB Financial Group | Academy Sports vs. Prudential Financial | Academy Sports vs. Deutsche Bank Aktiengesellschaft |
| Advanced Micro vs. salesforce inc | Advanced Micro vs. United Rentals | Advanced Micro vs. Verizon Communications | Advanced Micro vs. Clover Health Investments, |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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