Correlation Between Dicks Sporting and Zumiez
Can any of the company-specific risk be diversified away by investing in both Dicks Sporting and Zumiez 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 Zumiez 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 Zumiez Inc, you can compare the effects of market volatilities on Dicks Sporting and Zumiez 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 Zumiez. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dicks Sporting and Zumiez.
Diversification Opportunities for Dicks Sporting and Zumiez
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dicks and Zumiez is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Dicks Sporting Goods and Zumiez Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zumiez Inc 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 Zumiez. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zumiez Inc has no effect on the direction of Dicks Sporting i.e., Dicks Sporting and Zumiez go up and down completely randomly.
Pair Corralation between Dicks Sporting and Zumiez
Considering the 90-day investment horizon Dicks Sporting Goods is expected to generate 0.83 times more return on investment than Zumiez. However, Dicks Sporting Goods is 1.2 times less risky than Zumiez. It trades about 0.06 of its potential returns per unit of risk. Zumiez Inc is currently generating about 0.02 per unit of risk. If you would invest 11,092 in Dicks Sporting Goods on August 27, 2024 and sell it today you would earn a total of 9,924 from holding Dicks Sporting Goods or generate 89.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dicks Sporting Goods vs. Zumiez Inc
Performance |
| Timeline |
| Dicks Sporting Goods |
| Zumiez Inc |
Dicks Sporting and Zumiez Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dicks Sporting and Zumiez
The main advantage of trading using opposite Dicks Sporting and Zumiez positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dicks Sporting position performs unexpectedly, Zumiez 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 Zumiez will offset losses from the drop in Zumiez's long position.| Dicks Sporting vs. Oriental Culture Holding | Dicks Sporting vs. Hour Loop | Dicks Sporting vs. Qurate Retail Series | Dicks Sporting vs. Emerge Commerce |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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