Correlation Between Academy Sports and Plano Plano

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Can any of the company-specific risk be diversified away by investing in both Academy Sports and Plano Plano 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 Plano Plano 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 Plano Plano Desenvolvimento, you can compare the effects of market volatilities on Academy Sports and Plano Plano 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 Plano Plano. Check out your portfolio center. Please also check ongoing floating volatility patterns of Academy Sports and Plano Plano.

Diversification Opportunities for Academy Sports and Plano Plano

AcademyPlanoDiversified AwayAcademyPlanoDiversified Away100%
-0.27
  Correlation Coefficient

Very good diversification

The 3 months correlation between Academy and Plano is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Academy Sports and and Plano Plano Desenvolvimento in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plano Plano Desenvol 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 Plano Plano. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plano Plano Desenvol has no effect on the direction of Academy Sports i.e., Academy Sports and Plano Plano go up and down completely randomly.

Pair Corralation between Academy Sports and Plano Plano

Assuming the 90 days trading horizon Academy Sports is expected to generate 11.56 times less return on investment than Plano Plano. But when comparing it to its historical volatility, Academy Sports and is 1.31 times less risky than Plano Plano. It trades about 0.01 of its potential returns per unit of risk. Plano Plano Desenvolvimento is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  367.00  in Plano Plano Desenvolvimento on November 26, 2024 and sell it today you would earn a total of  692.00  from holding Plano Plano Desenvolvimento or generate 188.56% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy97.57%
ValuesDaily Returns

Academy Sports and  vs.  Plano Plano Desenvolvimento

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -30-20-10010
JavaScript chart by amCharts 3.21.15A2SO34 PLPL3
       Timeline  
Academy Sports 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Over the last 90 days Academy Sports and has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat weak basic indicators, Academy Sports may actually be approaching a critical reversion point that can send shares even higher in March 2025.
Plano Plano Desenvol 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Plano Plano Desenvolvimento has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb89101112

Academy Sports and Plano Plano Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.87-3.65-2.42-1.2-0.011.182.43.614.836.05 0.0300.0350.040
JavaScript chart by amCharts 3.21.15A2SO34 PLPL3
       Returns  

Pair Trading with Academy Sports and Plano Plano

The main advantage of trading using opposite Academy Sports and Plano Plano positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Academy Sports position performs unexpectedly, Plano Plano 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 Plano Plano will offset losses from the drop in Plano Plano's long position.
The idea behind Academy Sports and and Plano Plano Desenvolvimento 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.
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.

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