Correlation Between Academy Sports and BIONTECH
Can any of the company-specific risk be diversified away by investing in both Academy Sports and BIONTECH 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 BIONTECH 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 BIONTECH SE DRN, you can compare the effects of market volatilities on Academy Sports and BIONTECH 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 BIONTECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Academy Sports and BIONTECH.
Diversification Opportunities for Academy Sports and BIONTECH
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Academy and BIONTECH is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Academy Sports and and BIONTECH SE DRN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIONTECH SE DRN 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 BIONTECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIONTECH SE DRN has no effect on the direction of Academy Sports i.e., Academy Sports and BIONTECH go up and down completely randomly.
Pair Corralation between Academy Sports and BIONTECH
Assuming the 90 days trading horizon Academy Sports and is expected to generate 0.94 times more return on investment than BIONTECH. However, Academy Sports and is 1.06 times less risky than BIONTECH. It trades about 0.03 of its potential returns per unit of risk. BIONTECH SE DRN is currently generating about 0.01 per unit of risk. If you would invest 6,774 in Academy Sports and on October 17, 2024 and sell it today you would earn a total of 1,762 from holding Academy Sports and or generate 26.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.99% |
| Values | Daily Returns |
Academy Sports and vs. BIONTECH SE DRN
Performance |
| Timeline |
| Academy Sports |
| BIONTECH SE DRN |
Academy Sports and BIONTECH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Academy Sports and BIONTECH
The main advantage of trading using opposite Academy Sports and BIONTECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Academy Sports position performs unexpectedly, BIONTECH 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 BIONTECH will offset losses from the drop in BIONTECH's long position.| Academy Sports vs. Taiwan Semiconductor Manufacturing | Academy Sports vs. Apple Inc | Academy Sports vs. Alibaba Group Holding | Academy Sports vs. Microsoft |
| BIONTECH vs. Monster Beverage | BIONTECH vs. Academy Sports and | BIONTECH vs. Warner Music Group | BIONTECH vs. Ares Management |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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