Correlation Between Academy Sports and Alfa Holdings
Can any of the company-specific risk be diversified away by investing in both Academy Sports and Alfa Holdings 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 Alfa Holdings 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 Alfa Holdings SA, you can compare the effects of market volatilities on Academy Sports and Alfa Holdings 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 Alfa Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Academy Sports and Alfa Holdings.
Diversification Opportunities for Academy Sports and Alfa Holdings
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Academy and Alfa is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Academy Sports and and Alfa Holdings SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfa Holdings 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 Alfa Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfa Holdings SA has no effect on the direction of Academy Sports i.e., Academy Sports and Alfa Holdings go up and down completely randomly.
Pair Corralation between Academy Sports and Alfa Holdings
Assuming the 90 days trading horizon Academy Sports and is expected to generate 0.15 times more return on investment than Alfa Holdings. However, Academy Sports and is 6.84 times less risky than Alfa Holdings. It trades about -0.34 of its potential returns per unit of risk. Alfa Holdings SA is currently generating about -0.28 per unit of risk. If you would invest 8,640 in Academy Sports and on November 1, 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 | Very Weak |
| Accuracy | 85.71% |
| Values | Daily Returns |
Academy Sports and vs. Alfa Holdings SA
Performance |
| Timeline |
| Academy Sports |
| Alfa Holdings SA |
Academy Sports and Alfa Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Academy Sports and Alfa Holdings
The main advantage of trading using opposite Academy Sports and Alfa Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Academy Sports position performs unexpectedly, Alfa Holdings 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 Alfa Holdings will offset losses from the drop in Alfa Holdings' long position.| Academy Sports vs. PENN Entertainment, | Academy Sports vs. UnitedHealth Group Incorporated | Academy Sports vs. Live Nation Entertainment, | Academy Sports vs. Charter Communications |
| Alfa Holdings vs. Alfa Holdings SA | Alfa Holdings vs. Alfa Holdings SA | Alfa Holdings vs. Banco Alfa de | Alfa Holdings vs. Financeira Alfa SA |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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