Correlation Between DICKS Sporting and PPHE HOTEL
Can any of the company-specific risk be diversified away by investing in both DICKS Sporting and PPHE HOTEL 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 PPHE HOTEL 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 PPHE HOTEL GROUP, you can compare the effects of market volatilities on DICKS Sporting and PPHE HOTEL 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 PPHE HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of DICKS Sporting and PPHE HOTEL.
Diversification Opportunities for DICKS Sporting and PPHE HOTEL
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DICKS and PPHE is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding DICKS Sporting Goods and PPHE HOTEL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPHE HOTEL GROUP 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 PPHE HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PPHE HOTEL GROUP has no effect on the direction of DICKS Sporting i.e., DICKS Sporting and PPHE HOTEL go up and down completely randomly.
Pair Corralation between DICKS Sporting and PPHE HOTEL
Assuming the 90 days horizon DICKS Sporting Goods is expected to generate 0.93 times more return on investment than PPHE HOTEL. However, DICKS Sporting Goods is 1.08 times less risky than PPHE HOTEL. It trades about 0.27 of its potential returns per unit of risk. PPHE HOTEL GROUP is currently generating about -0.19 per unit of risk. If you would invest 21,880 in DICKS Sporting Goods on November 5, 2024 and sell it today you would earn a total of 2,600 from holding DICKS Sporting Goods or generate 11.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DICKS Sporting Goods vs. PPHE HOTEL GROUP
Performance |
| Timeline |
| DICKS Sporting Goods |
| PPHE HOTEL GROUP |
DICKS Sporting and PPHE HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DICKS Sporting and PPHE HOTEL
The main advantage of trading using opposite DICKS Sporting and PPHE HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DICKS Sporting position performs unexpectedly, PPHE HOTEL 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 PPHE HOTEL will offset losses from the drop in PPHE HOTEL's long position.| DICKS Sporting vs. Townsquare Media | DICKS Sporting vs. PENN Entertainment | DICKS Sporting vs. Aya Gold Silver | DICKS Sporting vs. Live Nation Entertainment |
| PPHE HOTEL vs. ARISTOCRAT LEISURE | PPHE HOTEL vs. Playtech plc | PPHE HOTEL vs. KIMBALL ELECTRONICS | PPHE HOTEL vs. Marie Brizard Wine |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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