Correlation Between Academy Sports and Hasbro
Can any of the company-specific risk be diversified away by investing in both Academy Sports and Hasbro 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 Hasbro 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 Hasbro Inc, you can compare the effects of market volatilities on Academy Sports and Hasbro 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 Hasbro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Academy Sports and Hasbro.
Diversification Opportunities for Academy Sports and Hasbro
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Academy and Hasbro is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Academy Sports Outdoors and Hasbro Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hasbro Inc 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 Hasbro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hasbro Inc has no effect on the direction of Academy Sports i.e., Academy Sports and Hasbro go up and down completely randomly.
Pair Corralation between Academy Sports and Hasbro
Considering the 90-day investment horizon Academy Sports Outdoors is expected to under-perform the Hasbro. In addition to that, Academy Sports is 1.43 times more volatile than Hasbro Inc. It trades about -0.11 of its total potential returns per unit of risk. Hasbro Inc is currently generating about -0.02 per unit of volatility. If you would invest 6,505 in Hasbro Inc on August 28, 2024 and sell it today you would lose (70.00) from holding Hasbro Inc or give up 1.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Academy Sports Outdoors vs. Hasbro Inc
Performance |
| Timeline |
| Academy Sports Outdoors |
| Hasbro Inc |
Academy Sports and Hasbro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Academy Sports and Hasbro
The main advantage of trading using opposite Academy Sports and Hasbro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Academy Sports position performs unexpectedly, Hasbro 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 Hasbro will offset losses from the drop in Hasbro's long position.| Academy Sports vs. Williams Sonoma | Academy Sports vs. AutoZone | Academy Sports vs. Ulta Beauty | Academy Sports vs. Best Buy Co |
| Hasbro vs. MCBC Holdings | Hasbro vs. Winnebago Industries | Hasbro vs. LCI Industries | Hasbro vs. Thor 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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