Correlation Between Dicks Sporting and SCOR PK
Can any of the company-specific risk be diversified away by investing in both Dicks Sporting and SCOR PK 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 SCOR PK 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 SCOR PK, you can compare the effects of market volatilities on Dicks Sporting and SCOR PK 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 SCOR PK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dicks Sporting and SCOR PK.
Diversification Opportunities for Dicks Sporting and SCOR PK
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dicks and SCOR is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Dicks Sporting Goods and SCOR PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCOR PK 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 SCOR PK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCOR PK has no effect on the direction of Dicks Sporting i.e., Dicks Sporting and SCOR PK go up and down completely randomly.
Pair Corralation between Dicks Sporting and SCOR PK
Considering the 90-day investment horizon Dicks Sporting is expected to generate 2.6 times less return on investment than SCOR PK. But when comparing it to its historical volatility, Dicks Sporting Goods is 1.59 times less risky than SCOR PK. It trades about 0.13 of its potential returns per unit of risk. SCOR PK is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 221.00 in SCOR PK on August 27, 2024 and sell it today you would earn a total of 29.00 from holding SCOR PK or generate 13.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dicks Sporting Goods vs. SCOR PK
Performance |
| Timeline |
| Dicks Sporting Goods |
| SCOR PK |
Dicks Sporting and SCOR PK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dicks Sporting and SCOR PK
The main advantage of trading using opposite Dicks Sporting and SCOR PK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dicks Sporting position performs unexpectedly, SCOR PK 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 SCOR PK will offset losses from the drop in SCOR PK's long position.| Dicks Sporting vs. RH | Dicks Sporting vs. AutoZone | Dicks Sporting vs. Best Buy Co | Dicks Sporting vs. Ulta Beauty |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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