Correlation Between Academy Sports and Chesapeake Energy
Can any of the company-specific risk be diversified away by investing in both Academy Sports and Chesapeake Energy 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 Chesapeake Energy 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 Chesapeake Energy, you can compare the effects of market volatilities on Academy Sports and Chesapeake Energy 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 Chesapeake Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Academy Sports and Chesapeake Energy.
Diversification Opportunities for Academy Sports and Chesapeake Energy
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Academy and Chesapeake is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Academy Sports Outdoors and Chesapeake Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chesapeake Energy 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 Chesapeake Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chesapeake Energy has no effect on the direction of Academy Sports i.e., Academy Sports and Chesapeake Energy go up and down completely randomly.
Pair Corralation between Academy Sports and Chesapeake Energy
If you would invest 6,404 in Chesapeake Energy on August 25, 2024 and sell it today you would earn a total of 0.00 from holding Chesapeake Energy or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
Academy Sports Outdoors vs. Chesapeake Energy
Performance |
| Timeline |
| Academy Sports Outdoors |
| Chesapeake Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Academy Sports and Chesapeake Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Academy Sports and Chesapeake Energy
The main advantage of trading using opposite Academy Sports and Chesapeake Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Academy Sports position performs unexpectedly, Chesapeake Energy 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 Chesapeake Energy will offset losses from the drop in Chesapeake Energy's long position.| Academy Sports vs. Williams Sonoma | Academy Sports vs. AutoZone | Academy Sports vs. Ulta Beauty | Academy Sports vs. Best Buy Co |
| Chesapeake Energy vs. Mattel Inc | Chesapeake Energy vs. Eldorado Gold Corp | Chesapeake Energy vs. Academy Sports Outdoors | Chesapeake Energy vs. Flexible Solutions International |
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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