Correlation Between Academy Sports and GobiMin
Can any of the company-specific risk be diversified away by investing in both Academy Sports and GobiMin 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 GobiMin 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 GobiMin, you can compare the effects of market volatilities on Academy Sports and GobiMin 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 GobiMin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Academy Sports and GobiMin.
Diversification Opportunities for Academy Sports and GobiMin
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Academy and GobiMin is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Academy Sports Outdoors and GobiMin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GobiMin 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 GobiMin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GobiMin has no effect on the direction of Academy Sports i.e., Academy Sports and GobiMin go up and down completely randomly.
Pair Corralation between Academy Sports and GobiMin
If you would invest 5,000 in Academy Sports Outdoors on September 13, 2024 and sell it today you would earn a total of 419.00 from holding Academy Sports Outdoors or generate 8.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Academy Sports Outdoors vs. GobiMin
Performance |
| Timeline |
| Academy Sports Outdoors |
| GobiMin |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Academy Sports and GobiMin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Academy Sports and GobiMin
The main advantage of trading using opposite Academy Sports and GobiMin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Academy Sports position performs unexpectedly, GobiMin 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 GobiMin will offset losses from the drop in GobiMin's long position.| Academy Sports vs. Williams Sonoma | Academy Sports vs. AutoZone | Academy Sports vs. Ulta Beauty | Academy Sports vs. Best Buy Co |
| GobiMin vs. JD Sports Fashion | GobiMin vs. Titan Machinery | GobiMin vs. Academy Sports Outdoors | GobiMin vs. Sonos Inc |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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