Correlation Between Academy Sports and PetMed Express
Can any of the company-specific risk be diversified away by investing in both Academy Sports and PetMed Express 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 PetMed Express 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 PetMed Express, you can compare the effects of market volatilities on Academy Sports and PetMed Express 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 PetMed Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of Academy Sports and PetMed Express.
Diversification Opportunities for Academy Sports and PetMed Express
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Academy and PetMed is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Academy Sports Outdoors and PetMed Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetMed Express 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 PetMed Express. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PetMed Express has no effect on the direction of Academy Sports i.e., Academy Sports and PetMed Express go up and down completely randomly.
Pair Corralation between Academy Sports and PetMed Express
Considering the 90-day investment horizon Academy Sports Outdoors is expected to generate 0.56 times more return on investment than PetMed Express. However, Academy Sports Outdoors is 1.79 times less risky than PetMed Express. It trades about -0.02 of its potential returns per unit of risk. PetMed Express is currently generating about -0.03 per unit of risk. If you would invest 5,478 in Academy Sports Outdoors on August 27, 2024 and sell it today you would lose (814.00) from holding Academy Sports Outdoors or give up 14.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Academy Sports Outdoors vs. PetMed Express
Performance |
| Timeline |
| Academy Sports Outdoors |
| PetMed Express |
Academy Sports and PetMed Express Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Academy Sports and PetMed Express
The main advantage of trading using opposite Academy Sports and PetMed Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Academy Sports position performs unexpectedly, PetMed Express 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 PetMed Express will offset losses from the drop in PetMed Express' long position.| Academy Sports vs. Oriental Culture Holding | Academy Sports vs. Hour Loop | Academy Sports vs. Qurate Retail Series | Academy Sports vs. Emerge Commerce |
| PetMed Express vs. Oriental Culture Holding | PetMed Express vs. Hour Loop | PetMed Express vs. Qurate Retail Series | PetMed Express vs. Emerge Commerce |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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