Correlation Between Dicks Sporting and GameStop Corp
Can any of the company-specific risk be diversified away by investing in both Dicks Sporting and GameStop Corp 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 Dicks Sporting and GameStop Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dicks Sporting Goods and GameStop Corp, you can compare the effects of market volatilities on Dicks Sporting and GameStop Corp 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 Dicks Sporting with a short position of GameStop Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dicks Sporting and GameStop Corp.
Diversification Opportunities for Dicks Sporting and GameStop Corp
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dicks and GameStop is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Dicks Sporting Goods and GameStop Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GameStop Corp and Dicks Sporting 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 Dicks Sporting Goods are associated (or correlated) with GameStop Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GameStop Corp has no effect on the direction of Dicks Sporting i.e., Dicks Sporting and GameStop Corp go up and down completely randomly.
Pair Corralation between Dicks Sporting and GameStop Corp
Considering the 90-day investment horizon Dicks Sporting Goods is expected to under-perform the GameStop Corp. But the stock apears to be less risky and, when comparing its historical volatility, Dicks Sporting Goods is 2.33 times less risky than GameStop Corp. The stock trades about -0.05 of its potential returns per unit of risk. The GameStop Corp is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 2,054 in GameStop Corp on August 24, 2024 and sell it today you would earn a total of 728.00 from holding GameStop Corp or generate 35.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dicks Sporting Goods vs. GameStop Corp
Performance |
| Timeline |
| Dicks Sporting Goods |
| GameStop Corp |
Dicks Sporting and GameStop Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dicks Sporting and GameStop Corp
The main advantage of trading using opposite Dicks Sporting and GameStop Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dicks Sporting position performs unexpectedly, GameStop Corp 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 GameStop Corp will offset losses from the drop in GameStop Corp's long position.| Dicks Sporting vs. Winmark | Dicks Sporting vs. Arko Corp | Dicks Sporting vs. ABIVAX Socit Anonyme | Dicks Sporting vs. SCOR PK |
| GameStop Corp vs. RH | GameStop Corp vs. Dicks Sporting Goods | GameStop Corp vs. Best Buy Co | GameStop Corp vs. AutoZone |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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