Correlation Between Academy Sports and Karsten SA
Can any of the company-specific risk be diversified away by investing in both Academy Sports and Karsten SA 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 Karsten SA 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 Karsten SA, you can compare the effects of market volatilities on Academy Sports and Karsten SA 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 Karsten SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Academy Sports and Karsten SA.
Diversification Opportunities for Academy Sports and Karsten SA
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Academy and Karsten is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Academy Sports and and Karsten SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Karsten SA 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 Karsten SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Karsten SA has no effect on the direction of Academy Sports i.e., Academy Sports and Karsten SA go up and down completely randomly.
Pair Corralation between Academy Sports and Karsten SA
Assuming the 90 days trading horizon Academy Sports and is expected to under-perform the Karsten SA. But the stock apears to be less risky and, when comparing its historical volatility, Academy Sports and is 15.25 times less risky than Karsten SA. The stock trades about -0.36 of its potential returns per unit of risk. The Karsten SA is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,189 in Karsten SA on November 7, 2024 and sell it today you would earn a total of 261.00 from holding Karsten SA or generate 11.92% 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. Karsten SA
Performance |
| Timeline |
| Academy Sports |
| Karsten SA |
Academy Sports and Karsten SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Academy Sports and Karsten SA
The main advantage of trading using opposite Academy Sports and Karsten SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Academy Sports position performs unexpectedly, Karsten SA 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 Karsten SA will offset losses from the drop in Karsten SA's long position.| Academy Sports vs. Taiwan Semiconductor Manufacturing | Academy Sports vs. Apple Inc | Academy Sports vs. Alibaba Group Holding | Academy Sports vs. Microsoft |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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