Correlation Between Dicks Sporting and Winmark
Can any of the company-specific risk be diversified away by investing in both Dicks Sporting and Winmark 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 Winmark 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 Winmark, you can compare the effects of market volatilities on Dicks Sporting and Winmark 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 Winmark. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dicks Sporting and Winmark.
Diversification Opportunities for Dicks Sporting and Winmark
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dicks and Winmark is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Dicks Sporting Goods and Winmark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winmark 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 Winmark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winmark has no effect on the direction of Dicks Sporting i.e., Dicks Sporting and Winmark go up and down completely randomly.
Pair Corralation between Dicks Sporting and Winmark
Considering the 90-day investment horizon Dicks Sporting Goods is expected to generate 1.21 times more return on investment than Winmark. However, Dicks Sporting is 1.21 times more volatile than Winmark. It trades about 0.12 of its potential returns per unit of risk. Winmark is currently generating about -0.1 per unit of risk. If you would invest 22,803 in Dicks Sporting Goods on November 18, 2024 and sell it today you would earn a total of 1,033 from holding Dicks Sporting Goods or generate 4.53% 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. Winmark
Performance |
| Timeline |
| Dicks Sporting Goods |
| Winmark |
Dicks Sporting and Winmark Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dicks Sporting and Winmark
The main advantage of trading using opposite Dicks Sporting and Winmark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dicks Sporting position performs unexpectedly, Winmark 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 Winmark will offset losses from the drop in Winmark's long position.| Dicks Sporting vs. RH | Dicks Sporting vs. AutoZone | Dicks Sporting vs. Best Buy Co | Dicks Sporting vs. Ulta Beauty |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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