Correlation Between DICKS Sporting and TERADATA
Can any of the company-specific risk be diversified away by investing in both DICKS Sporting and TERADATA 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 TERADATA 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 TERADATA, you can compare the effects of market volatilities on DICKS Sporting and TERADATA 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 TERADATA. Check out your portfolio center. Please also check ongoing floating volatility patterns of DICKS Sporting and TERADATA.
Diversification Opportunities for DICKS Sporting and TERADATA
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DICKS and TERADATA is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding DICKS Sporting Goods and TERADATA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TERADATA 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 TERADATA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TERADATA has no effect on the direction of DICKS Sporting i.e., DICKS Sporting and TERADATA go up and down completely randomly.
Pair Corralation between DICKS Sporting and TERADATA
Assuming the 90 days horizon DICKS Sporting Goods is expected to generate 1.54 times more return on investment than TERADATA. However, DICKS Sporting is 1.54 times more volatile than TERADATA. It trades about 0.03 of its potential returns per unit of risk. TERADATA is currently generating about 0.03 per unit of risk. If you would invest 19,753 in DICKS Sporting Goods on October 18, 2024 and sell it today you would earn a total of 1,337 from holding DICKS Sporting Goods or generate 6.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.19% |
| Values | Daily Returns |
DICKS Sporting Goods vs. TERADATA
Performance |
| Timeline |
| DICKS Sporting Goods |
| TERADATA |
DICKS Sporting and TERADATA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DICKS Sporting and TERADATA
The main advantage of trading using opposite DICKS Sporting and TERADATA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DICKS Sporting position performs unexpectedly, TERADATA 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 TERADATA will offset losses from the drop in TERADATA's long position.| DICKS Sporting vs. Flutter Entertainment PLC | DICKS Sporting vs. PARKEN Sport Entertainment | DICKS Sporting vs. SQUIRREL MEDIA SA | DICKS Sporting vs. Nexstar Media Group |
| TERADATA vs. Chesapeake Utilities | TERADATA vs. DICKS Sporting Goods | TERADATA vs. IMPERIAL TOBACCO | TERADATA vs. SPORTING |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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