Correlation Between Academy Sports and Kandi Technologies
Can any of the company-specific risk be diversified away by investing in both Academy Sports and Kandi Technologies 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 Kandi Technologies 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 Kandi Technologies Group, you can compare the effects of market volatilities on Academy Sports and Kandi Technologies 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 Kandi Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Academy Sports and Kandi Technologies.
Diversification Opportunities for Academy Sports and Kandi Technologies
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Academy and Kandi is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Academy Sports Outdoors and Kandi Technologies Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kandi Technologies 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 Kandi Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kandi Technologies has no effect on the direction of Academy Sports i.e., Academy Sports and Kandi Technologies go up and down completely randomly.
Pair Corralation between Academy Sports and Kandi Technologies
Considering the 90-day investment horizon Academy Sports Outdoors is expected to generate 0.51 times more return on investment than Kandi Technologies. However, Academy Sports Outdoors is 1.98 times less risky than Kandi Technologies. It trades about -0.05 of its potential returns per unit of risk. Kandi Technologies Group is currently generating about -0.03 per unit of risk. If you would invest 5,086 in Academy Sports Outdoors on September 1, 2024 and sell it today you would lose (161.00) from holding Academy Sports Outdoors or give up 3.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Academy Sports Outdoors vs. Kandi Technologies Group
Performance |
| Timeline |
| Academy Sports Outdoors |
| Kandi Technologies |
Academy Sports and Kandi Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Academy Sports and Kandi Technologies
The main advantage of trading using opposite Academy Sports and Kandi Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Academy Sports position performs unexpectedly, Kandi Technologies 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 Kandi Technologies will offset losses from the drop in Kandi Technologies' long position.| Academy Sports vs. Alcon AG | Academy Sports vs. The Cooper Companies, | Academy Sports vs. AngioDynamics | Academy Sports vs. AptarGroup |
| Kandi Technologies vs. Hyliion Holdings Corp | Kandi Technologies vs. Foresight Autonomous Holdings | Kandi Technologies vs. Aeva Technologies | Kandi Technologies vs. Aeye 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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