Correlation Between Academy Sports and 02376LAA3

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Can any of the company-specific risk be diversified away by investing in both Academy Sports and 02376LAA3 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 02376LAA3 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 AAL 395 11 JUL 30, you can compare the effects of market volatilities on Academy Sports and 02376LAA3 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 02376LAA3. Check out your portfolio center. Please also check ongoing floating volatility patterns of Academy Sports and 02376LAA3.

Diversification Opportunities for Academy Sports and 02376LAA3

-0.06
  Correlation Coefficient

Good diversification

The 3 months correlation between Academy and 02376LAA3 is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Academy Sports Outdoors and AAL 395 11 JUL 30 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 02376LAA3 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 02376LAA3. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 02376LAA3 has no effect on the direction of Academy Sports i.e., Academy Sports and 02376LAA3 go up and down completely randomly.

Pair Corralation between Academy Sports and 02376LAA3

Considering the 90-day investment horizon Academy Sports Outdoors is expected to generate 0.49 times more return on investment than 02376LAA3. However, Academy Sports Outdoors is 2.03 times less risky than 02376LAA3. It trades about -0.14 of its potential returns per unit of risk. AAL 395 11 JUL 30 is currently generating about -0.25 per unit of risk. If you would invest  5,269  in Academy Sports Outdoors on September 3, 2024 and sell it today you would lose (344.00) from holding Academy Sports Outdoors or give up 6.53% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy55.0%
ValuesDaily Returns

Academy Sports Outdoors  vs.  AAL 395 11 JUL 30

 Performance 
       Timeline  
Academy Sports Outdoors 

Risk-Adjusted Performance

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Over the last 90 days Academy Sports Outdoors has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.
02376LAA3 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days AAL 395 11 JUL 30 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for AAL 395 11 JUL 30 investors.

Academy Sports and 02376LAA3 Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Academy Sports and 02376LAA3

The main advantage of trading using opposite Academy Sports and 02376LAA3 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Academy Sports position performs unexpectedly, 02376LAA3 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 02376LAA3 will offset losses from the drop in 02376LAA3's long position.
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The idea behind Academy Sports Outdoors and AAL 395 11 JUL 30 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.

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