Correlation Between Academy Sports and XCHG Limited
Can any of the company-specific risk be diversified away by investing in both Academy Sports and XCHG Limited 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 XCHG Limited 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 XCHG Limited American, you can compare the effects of market volatilities on Academy Sports and XCHG Limited 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 XCHG Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Academy Sports and XCHG Limited.
Diversification Opportunities for Academy Sports and XCHG Limited
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Academy and XCHG is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Academy Sports Outdoors and XCHG Limited American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XCHG Limited American 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 XCHG Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XCHG Limited American has no effect on the direction of Academy Sports i.e., Academy Sports and XCHG Limited go up and down completely randomly.
Pair Corralation between Academy Sports and XCHG Limited
Considering the 90-day investment horizon Academy Sports Outdoors is expected to generate 0.29 times more return on investment than XCHG Limited. However, Academy Sports Outdoors is 3.42 times less risky than XCHG Limited. It trades about -0.08 of its potential returns per unit of risk. XCHG Limited American is currently generating about -0.11 per unit of risk. If you would invest 5,269 in Academy Sports Outdoors on September 4, 2024 and sell it today you would lose (213.00) from holding Academy Sports Outdoors or give up 4.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Academy Sports Outdoors vs. XCHG Limited American
Performance |
| Timeline |
| Academy Sports Outdoors |
| XCHG Limited American |
Academy Sports and XCHG Limited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Academy Sports and XCHG Limited
The main advantage of trading using opposite Academy Sports and XCHG Limited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Academy Sports position performs unexpectedly, XCHG Limited 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 XCHG Limited will offset losses from the drop in XCHG Limited's long position.| Academy Sports vs. Williams Sonoma | Academy Sports vs. AutoZone | Academy Sports vs. Ulta Beauty | Academy Sports vs. Best Buy Co |
| XCHG Limited vs. Small Cap Premium | XCHG Limited vs. Lincoln Educational Services | XCHG Limited vs. PennantPark Floating Rate | XCHG Limited vs. Kite Realty Group |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |