Correlation Between Academy Sports and Selina Hospitality
Can any of the company-specific risk be diversified away by investing in both Academy Sports and Selina Hospitality 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 Selina Hospitality 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 Selina Hospitality PLC, you can compare the effects of market volatilities on Academy Sports and Selina Hospitality 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 Selina Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Academy Sports and Selina Hospitality.
Diversification Opportunities for Academy Sports and Selina Hospitality
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Academy and Selina is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Academy Sports Outdoors and Selina Hospitality PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Selina Hospitality PLC 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 Selina Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Selina Hospitality PLC has no effect on the direction of Academy Sports i.e., Academy Sports and Selina Hospitality go up and down completely randomly.
Pair Corralation between Academy Sports and Selina Hospitality
Considering the 90-day investment horizon Academy Sports is expected to generate 218.25 times less return on investment than Selina Hospitality. But when comparing it to its historical volatility, Academy Sports Outdoors is 28.68 times less risky than Selina Hospitality. It trades about 0.02 of its potential returns per unit of risk. Selina Hospitality PLC is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1.27 in Selina Hospitality PLC on September 13, 2024 and sell it today you would lose (0.27) from holding Selina Hospitality PLC or give up 21.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 1.21% |
| Values | Daily Returns |
Academy Sports Outdoors vs. Selina Hospitality PLC
Performance |
| Timeline |
| Academy Sports Outdoors |
| Selina Hospitality PLC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Academy Sports and Selina Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Academy Sports and Selina Hospitality
The main advantage of trading using opposite Academy Sports and Selina Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Academy Sports position performs unexpectedly, Selina Hospitality 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 Selina Hospitality will offset losses from the drop in Selina Hospitality's long position.| Academy Sports vs. Williams Sonoma | Academy Sports vs. AutoZone | Academy Sports vs. Ulta Beauty | Academy Sports vs. Best Buy Co |
| Selina Hospitality vs. GoHealth | Selina Hospitality vs. Direct Line Insurance | Selina Hospitality vs. Valneva SE ADR | Selina Hospitality vs. Kaltura |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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