Correlation Between Academy Sports and PGE Corp
Can any of the company-specific risk be diversified away by investing in both Academy Sports and PGE Corp 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 PGE Corp 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 PGE Corp, you can compare the effects of market volatilities on Academy Sports and PGE Corp 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 PGE Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Academy Sports and PGE Corp.
Diversification Opportunities for Academy Sports and PGE Corp
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Academy and PGE is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Academy Sports Outdoors and PGE Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PGE Corp 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 PGE Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PGE Corp has no effect on the direction of Academy Sports i.e., Academy Sports and PGE Corp go up and down completely randomly.
Pair Corralation between Academy Sports and PGE Corp
Considering the 90-day investment horizon Academy Sports Outdoors is expected to under-perform the PGE Corp. In addition to that, Academy Sports is 2.38 times more volatile than PGE Corp. It trades about -0.16 of its total potential returns per unit of risk. PGE Corp is currently generating about 0.22 per unit of volatility. If you would invest 2,051 in PGE Corp on August 29, 2024 and sell it today you would earn a total of 100.00 from holding PGE Corp or generate 4.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Academy Sports Outdoors vs. PGE Corp
Performance |
| Timeline |
| Academy Sports Outdoors |
| PGE Corp |
Academy Sports and PGE Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Academy Sports and PGE Corp
The main advantage of trading using opposite Academy Sports and PGE Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Academy Sports position performs unexpectedly, PGE Corp 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 PGE Corp will offset losses from the drop in PGE Corp's long position.| Academy Sports vs. Williams Sonoma | Academy Sports vs. AutoZone | Academy Sports vs. Ulta Beauty | Academy Sports vs. RH |
| PGE Corp vs. Consolidated Edison | PGE Corp vs. Southern Company | PGE Corp vs. Entergy | PGE Corp vs. Pinnacle West Capital |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |