Correlation Between Academy Sports and Contextlogic
Can any of the company-specific risk be diversified away by investing in both Academy Sports and Contextlogic 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 Contextlogic 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 Contextlogic, you can compare the effects of market volatilities on Academy Sports and Contextlogic 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 Contextlogic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Academy Sports and Contextlogic.
Diversification Opportunities for Academy Sports and Contextlogic
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Academy and Contextlogic is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Academy Sports Outdoors and Contextlogic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Contextlogic 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 Contextlogic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Contextlogic has no effect on the direction of Academy Sports i.e., Academy Sports and Contextlogic go up and down completely randomly.
Pair Corralation between Academy Sports and Contextlogic
Considering the 90-day investment horizon Academy Sports Outdoors is expected to under-perform the Contextlogic. In addition to that, Academy Sports is 1.1 times more volatile than Contextlogic. It trades about -0.11 of its total potential returns per unit of risk. Contextlogic is currently generating about 0.13 per unit of volatility. If you would invest 671.00 in Contextlogic on August 30, 2024 and sell it today you would earn a total of 40.00 from holding Contextlogic or generate 5.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Academy Sports Outdoors vs. Contextlogic
Performance |
| Timeline |
| Academy Sports Outdoors |
| Contextlogic |
Academy Sports and Contextlogic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Academy Sports and Contextlogic
The main advantage of trading using opposite Academy Sports and Contextlogic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Academy Sports position performs unexpectedly, Contextlogic 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 Contextlogic will offset losses from the drop in Contextlogic's long position.| Academy Sports vs. Williams Sonoma | Academy Sports vs. AutoZone | Academy Sports vs. Ulta Beauty | Academy Sports vs. Best Buy Co |
| Contextlogic vs. PDD Holdings | Contextlogic vs. JD Inc Adr | Contextlogic vs. Alibaba Group Holding | Contextlogic vs. Global E Online |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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