Correlation Between Academy Sports and Miniso Group
Can any of the company-specific risk be diversified away by investing in both Academy Sports and Miniso Group 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 Miniso Group 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 Miniso Group Holding, you can compare the effects of market volatilities on Academy Sports and Miniso Group 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 Miniso Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Academy Sports and Miniso Group.
Diversification Opportunities for Academy Sports and Miniso Group
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Academy and Miniso is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Academy Sports Outdoors and Miniso Group Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Miniso Group Holding 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 Miniso Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Miniso Group Holding has no effect on the direction of Academy Sports i.e., Academy Sports and Miniso Group go up and down completely randomly.
Pair Corralation between Academy Sports and Miniso Group
Considering the 90-day investment horizon Academy Sports Outdoors is expected to generate 0.82 times more return on investment than Miniso Group. However, Academy Sports Outdoors is 1.22 times less risky than Miniso Group. It trades about 0.05 of its potential returns per unit of risk. Miniso Group Holding is currently generating about -0.05 per unit of risk. If you would invest 5,258 in Academy Sports Outdoors on November 18, 2024 and sell it today you would earn a total of 98.00 from holding Academy Sports Outdoors or generate 1.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Academy Sports Outdoors vs. Miniso Group Holding
Performance |
| Timeline |
| Academy Sports Outdoors |
| Miniso Group Holding |
Academy Sports and Miniso Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Academy Sports and Miniso Group
The main advantage of trading using opposite Academy Sports and Miniso Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Academy Sports position performs unexpectedly, Miniso Group 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 Miniso Group will offset losses from the drop in Miniso Group's long position.| Academy Sports vs. Williams Sonoma | Academy Sports vs. AutoZone | Academy Sports vs. Ulta Beauty | Academy Sports vs. Best Buy Co |
| Miniso Group vs. Leslies | Miniso Group vs. Sally Beauty Holdings | Miniso Group vs. ODP Corp | Miniso Group vs. 1 800 FLOWERSCOM |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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