Correlation Between DICKS Sporting and Algonquin Power
Can any of the company-specific risk be diversified away by investing in both DICKS Sporting and Algonquin Power 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 Algonquin Power 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 Algonquin Power Utilities, you can compare the effects of market volatilities on DICKS Sporting and Algonquin Power 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 Algonquin Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of DICKS Sporting and Algonquin Power.
Diversification Opportunities for DICKS Sporting and Algonquin Power
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between DICKS and Algonquin is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding DICKS Sporting Goods and Algonquin Power Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Algonquin Power Utilities 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 Algonquin Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Algonquin Power Utilities has no effect on the direction of DICKS Sporting i.e., DICKS Sporting and Algonquin Power go up and down completely randomly.
Pair Corralation between DICKS Sporting and Algonquin Power
Assuming the 90 days horizon DICKS Sporting Goods is expected to generate 1.41 times more return on investment than Algonquin Power. However, DICKS Sporting is 1.41 times more volatile than Algonquin Power Utilities. It trades about 0.03 of its potential returns per unit of risk. Algonquin Power Utilities is currently generating about -0.09 per unit of risk. If you would invest 17,139 in DICKS Sporting Goods on August 25, 2024 and sell it today you would earn a total of 917.00 from holding DICKS Sporting Goods or generate 5.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DICKS Sporting Goods vs. Algonquin Power Utilities
Performance |
| Timeline |
| DICKS Sporting Goods |
| Algonquin Power Utilities |
DICKS Sporting and Algonquin Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DICKS Sporting and Algonquin Power
The main advantage of trading using opposite DICKS Sporting and Algonquin Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DICKS Sporting position performs unexpectedly, Algonquin Power 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 Algonquin Power will offset losses from the drop in Algonquin Power's long position.| DICKS Sporting vs. Scandinavian Tobacco Group | DICKS Sporting vs. Sunstone Hotel Investors | DICKS Sporting vs. SHELF DRILLING LTD | DICKS Sporting vs. Regal Hotels International |
| Algonquin Power vs. EMBARK EDUCATION LTD | Algonquin Power vs. Corsair Gaming | Algonquin Power vs. Ryanair Holdings plc | Algonquin Power vs. Perdoceo Education |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |