Correlation Between China Communications and DICKS Sporting
Can any of the company-specific risk be diversified away by investing in both China Communications and DICKS Sporting 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 China Communications and DICKS Sporting into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Communications Services and DICKS Sporting Goods, you can compare the effects of market volatilities on China Communications and DICKS Sporting 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 China Communications with a short position of DICKS Sporting. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Communications and DICKS Sporting.
Diversification Opportunities for China Communications and DICKS Sporting
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between China and DICKS is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding China Communications Services and DICKS Sporting Goods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DICKS Sporting Goods and China Communications 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 China Communications Services are associated (or correlated) with DICKS Sporting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DICKS Sporting Goods has no effect on the direction of China Communications i.e., China Communications and DICKS Sporting go up and down completely randomly.
Pair Corralation between China Communications and DICKS Sporting
Assuming the 90 days horizon China Communications Services is expected to generate 2.54 times more return on investment than DICKS Sporting. However, China Communications is 2.54 times more volatile than DICKS Sporting Goods. It trades about 0.07 of its potential returns per unit of risk. DICKS Sporting Goods is currently generating about 0.06 per unit of risk. If you would invest 13.00 in China Communications Services on September 2, 2024 and sell it today you would earn a total of 35.00 from holding China Communications Services or generate 269.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Communications Services vs. DICKS Sporting Goods
Performance |
| Timeline |
| China Communications |
| DICKS Sporting Goods |
China Communications and DICKS Sporting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Communications and DICKS Sporting
The main advantage of trading using opposite China Communications and DICKS Sporting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Communications position performs unexpectedly, DICKS Sporting 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 DICKS Sporting will offset losses from the drop in DICKS Sporting's long position.| China Communications vs. Deutsche Telekom AG | China Communications vs. Superior Plus Corp | China Communications vs. NMI Holdings | China Communications vs. Origin Agritech |
| DICKS Sporting vs. FLOW TRADERS LTD | DICKS Sporting vs. SBA Communications Corp | DICKS Sporting vs. Charter Communications | DICKS Sporting vs. Consolidated Communications Holdings |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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