Correlation Between Academy Sports and Surf Air
Can any of the company-specific risk be diversified away by investing in both Academy Sports and Surf Air 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 Surf Air 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 Surf Air Mobility, you can compare the effects of market volatilities on Academy Sports and Surf Air 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 Surf Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Academy Sports and Surf Air.
Diversification Opportunities for Academy Sports and Surf Air
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Academy and Surf is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Academy Sports Outdoors and Surf Air Mobility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surf Air Mobility 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 Surf Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surf Air Mobility has no effect on the direction of Academy Sports i.e., Academy Sports and Surf Air go up and down completely randomly.
Pair Corralation between Academy Sports and Surf Air
Considering the 90-day investment horizon Academy Sports Outdoors is expected to under-perform the Surf Air. But the stock apears to be less risky and, when comparing its historical volatility, Academy Sports Outdoors is 5.0 times less risky than Surf Air. The stock trades about -0.3 of its potential returns per unit of risk. The Surf Air Mobility is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 174.00 in Surf Air Mobility on August 27, 2024 and sell it today you would earn a total of 94.00 from holding Surf Air Mobility or generate 54.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Academy Sports Outdoors vs. Surf Air Mobility
Performance |
| Timeline |
| Academy Sports Outdoors |
| Surf Air Mobility |
Academy Sports and Surf Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Academy Sports and Surf Air
The main advantage of trading using opposite Academy Sports and Surf Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Academy Sports position performs unexpectedly, Surf Air 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 Surf Air will offset losses from the drop in Surf Air's long position.| Academy Sports vs. Oriental Culture Holding | Academy Sports vs. Hour Loop | Academy Sports vs. Qurate Retail Series | Academy Sports vs. Emerge Commerce |
| Surf Air vs. Canlan Ice Sports | Surf Air vs. Academy Sports Outdoors | Surf Air vs. Verra Mobility Corp | Surf Air vs. Nyxoah |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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