Correlation Between Academy Sports and Brunswick
Can any of the company-specific risk be diversified away by investing in both Academy Sports and Brunswick 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 Brunswick into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Academy Sports Outdoors and Brunswick, you can compare the effects of market volatilities on Academy Sports and Brunswick 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 Brunswick. Check out your portfolio center. Please also check ongoing floating volatility patterns of Academy Sports and Brunswick.
Diversification Opportunities for Academy Sports and Brunswick
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Academy and Brunswick is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Academy Sports Outdoors and Brunswick in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brunswick 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 Outdoors are associated (or correlated) with Brunswick. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brunswick has no effect on the direction of Academy Sports i.e., Academy Sports and Brunswick go up and down completely randomly.
Pair Corralation between Academy Sports and Brunswick
Considering the 90-day investment horizon Academy Sports Outdoors is expected to under-perform the Brunswick. But the stock apears to be less risky and, when comparing its historical volatility, Academy Sports Outdoors is 1.09 times less risky than Brunswick. The stock trades about -0.16 of its potential returns per unit of risk. The Brunswick is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 8,162 in Brunswick on August 29, 2024 and sell it today you would lose (106.00) from holding Brunswick or give up 1.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Academy Sports Outdoors vs. Brunswick
Performance |
| Timeline |
| Academy Sports Outdoors |
| Brunswick |
Academy Sports and Brunswick Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Academy Sports and Brunswick
The main advantage of trading using opposite Academy Sports and Brunswick positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Academy Sports position performs unexpectedly, Brunswick 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 Brunswick will offset losses from the drop in Brunswick's long position.| Academy Sports vs. Williams Sonoma | Academy Sports vs. AutoZone | Academy Sports vs. Ulta Beauty | Academy Sports vs. RH |
| Brunswick vs. MCBC Holdings | Brunswick vs. Marine Products | Brunswick vs. Winnebago Industries | Brunswick vs. LCI Industries |
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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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