Correlation Between Academy Sports and Citizens Financial
Can any of the company-specific risk be diversified away by investing in both Academy Sports and Citizens Financial 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 Citizens Financial 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 Citizens Financial Group,, you can compare the effects of market volatilities on Academy Sports and Citizens Financial 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 Citizens Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Academy Sports and Citizens Financial.
Diversification Opportunities for Academy Sports and Citizens Financial
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Academy and Citizens is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Academy Sports and and Citizens Financial Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens Financial Group, 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 Citizens Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens Financial Group, has no effect on the direction of Academy Sports i.e., Academy Sports and Citizens Financial go up and down completely randomly.
Pair Corralation between Academy Sports and Citizens Financial
Assuming the 90 days trading horizon Academy Sports and is expected to under-perform the Citizens Financial. But the stock apears to be less risky and, when comparing its historical volatility, Academy Sports and is 3.67 times less risky than Citizens Financial. The stock trades about -0.36 of its potential returns per unit of risk. The Citizens Financial Group, is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 27,131 in Citizens Financial Group, on November 7, 2024 and sell it today you would earn a total of 103.00 from holding Citizens Financial Group, or generate 0.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 72.73% |
| Values | Daily Returns |
Academy Sports and vs. Citizens Financial Group,
Performance |
| Timeline |
| Academy Sports |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
| Citizens Financial Group, |
Academy Sports and Citizens Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Academy Sports and Citizens Financial
The main advantage of trading using opposite Academy Sports and Citizens Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Academy Sports position performs unexpectedly, Citizens Financial 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 Citizens Financial will offset losses from the drop in Citizens Financial's long position.| Academy Sports vs. Taiwan Semiconductor Manufacturing | Academy Sports vs. Apple Inc | Academy Sports vs. Alibaba Group Holding | Academy Sports vs. Microsoft |
| Citizens Financial vs. HDFC Bank Limited | Citizens Financial vs. Ita Unibanco Holding | Citizens Financial vs. Ita Unibanco Holding | Citizens Financial vs. Deutsche Bank Aktiengesellschaft |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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