Correlation Between Academy Sports and Green Street
Can any of the company-specific risk be diversified away by investing in both Academy Sports and Green Street 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 Green Street 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 Green Street Capital, you can compare the effects of market volatilities on Academy Sports and Green Street 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 Green Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Academy Sports and Green Street.
Diversification Opportunities for Academy Sports and Green Street
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Academy and Green is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Academy Sports Outdoors and Green Street Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Street Capital 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 Green Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Street Capital has no effect on the direction of Academy Sports i.e., Academy Sports and Green Street go up and down completely randomly.
Pair Corralation between Academy Sports and Green Street
Considering the 90-day investment horizon Academy Sports Outdoors is expected to generate 0.46 times more return on investment than Green Street. However, Academy Sports Outdoors is 2.16 times less risky than Green Street. It trades about 0.01 of its potential returns per unit of risk. Green Street Capital is currently generating about -0.05 per unit of risk. If you would invest 5,468 in Academy Sports Outdoors on September 12, 2024 and sell it today you would lose (210.00) from holding Academy Sports Outdoors or give up 3.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Academy Sports Outdoors vs. Green Street Capital
Performance |
| Timeline |
| Academy Sports Outdoors |
| Green Street Capital |
Academy Sports and Green Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Academy Sports and Green Street
The main advantage of trading using opposite Academy Sports and Green Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Academy Sports position performs unexpectedly, Green Street 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 Green Street will offset losses from the drop in Green Street's long position.| Academy Sports vs. Williams Sonoma | Academy Sports vs. AutoZone | Academy Sports vs. Ulta Beauty | Academy Sports vs. Best Buy Co |
| Green Street vs. Apogee Enterprises | Green Street vs. Electronic Arts | Green Street vs. Academy Sports Outdoors | Green Street vs. Sun Country Airlines |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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