Correlation Between Academy Sports and FG Annuities
Can any of the company-specific risk be diversified away by investing in both Academy Sports and FG Annuities 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 FG Annuities 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 FG Annuities Life, you can compare the effects of market volatilities on Academy Sports and FG Annuities 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 FG Annuities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Academy Sports and FG Annuities.
Diversification Opportunities for Academy Sports and FG Annuities
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Academy and FGN is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Academy Sports Outdoors and FG Annuities Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FG Annuities Life 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 FG Annuities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FG Annuities Life has no effect on the direction of Academy Sports i.e., Academy Sports and FG Annuities go up and down completely randomly.
Pair Corralation between Academy Sports and FG Annuities
Considering the 90-day investment horizon Academy Sports Outdoors is expected to generate 3.44 times more return on investment than FG Annuities. However, Academy Sports is 3.44 times more volatile than FG Annuities Life. It trades about 0.08 of its potential returns per unit of risk. FG Annuities Life is currently generating about -0.11 per unit of risk. If you would invest 5,073 in Academy Sports Outdoors on September 12, 2024 and sell it today you would earn a total of 185.00 from holding Academy Sports Outdoors or generate 3.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Academy Sports Outdoors vs. FG Annuities Life
Performance |
| Timeline |
| Academy Sports Outdoors |
| FG Annuities Life |
Academy Sports and FG Annuities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Academy Sports and FG Annuities
The main advantage of trading using opposite Academy Sports and FG Annuities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Academy Sports position performs unexpectedly, FG Annuities 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 FG Annuities will offset losses from the drop in FG Annuities' long position.| Academy Sports vs. Williams Sonoma | Academy Sports vs. AutoZone | Academy Sports vs. Ulta Beauty | Academy Sports vs. Best Buy Co |
| FG Annuities vs. Codexis | FG Annuities vs. Afya | FG Annuities vs. Origin Materials | FG Annuities vs. Ecovyst |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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