Correlation Between Academy Sports and NSTAR Electric
Can any of the company-specific risk be diversified away by investing in both Academy Sports and NSTAR Electric 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 NSTAR Electric 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 NSTAR Electric, you can compare the effects of market volatilities on Academy Sports and NSTAR Electric 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 NSTAR Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Academy Sports and NSTAR Electric.
Diversification Opportunities for Academy Sports and NSTAR Electric
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Academy and NSTAR is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Academy Sports Outdoors and NSTAR Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NSTAR Electric 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 NSTAR Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NSTAR Electric has no effect on the direction of Academy Sports i.e., Academy Sports and NSTAR Electric go up and down completely randomly.
Pair Corralation between Academy Sports and NSTAR Electric
Considering the 90-day investment horizon Academy Sports Outdoors is expected to under-perform the NSTAR Electric. In addition to that, Academy Sports is 4.36 times more volatile than NSTAR Electric. It trades about -0.15 of its total potential returns per unit of risk. NSTAR Electric is currently generating about 0.34 per unit of volatility. If you would invest 6,994 in NSTAR Electric on November 6, 2024 and sell it today you would earn a total of 256.00 from holding NSTAR Electric or generate 3.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Academy Sports Outdoors vs. NSTAR Electric
Performance |
| Timeline |
| Academy Sports Outdoors |
| NSTAR Electric |
Academy Sports and NSTAR Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Academy Sports and NSTAR Electric
The main advantage of trading using opposite Academy Sports and NSTAR Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Academy Sports position performs unexpectedly, NSTAR Electric 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 NSTAR Electric will offset losses from the drop in NSTAR Electric's long position.| Academy Sports vs. Williams Sonoma | Academy Sports vs. AutoZone | Academy Sports vs. Ulta Beauty | Academy Sports vs. Best Buy Co |
| NSTAR Electric vs. Codexis | NSTAR Electric vs. Carlyle Group | NSTAR Electric vs. CF Industries Holdings | NSTAR Electric vs. American Vanguard |
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 CEOs Directory module to screen CEOs from public companies around the world.
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