Correlation Between DICKS Sporting and LUMI GRUPPEN
Can any of the company-specific risk be diversified away by investing in both DICKS Sporting and LUMI GRUPPEN 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 LUMI GRUPPEN 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 LUMI GRUPPEN AS, you can compare the effects of market volatilities on DICKS Sporting and LUMI GRUPPEN 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 LUMI GRUPPEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of DICKS Sporting and LUMI GRUPPEN.
Diversification Opportunities for DICKS Sporting and LUMI GRUPPEN
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DICKS and LUMI is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding DICKS Sporting Goods and LUMI GRUPPEN AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LUMI GRUPPEN AS 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 LUMI GRUPPEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LUMI GRUPPEN AS has no effect on the direction of DICKS Sporting i.e., DICKS Sporting and LUMI GRUPPEN go up and down completely randomly.
Pair Corralation between DICKS Sporting and LUMI GRUPPEN
Assuming the 90 days horizon DICKS Sporting is expected to generate 1.63 times less return on investment than LUMI GRUPPEN. But when comparing it to its historical volatility, DICKS Sporting Goods is 2.05 times less risky than LUMI GRUPPEN. It trades about 0.04 of its potential returns per unit of risk. LUMI GRUPPEN AS is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 101.00 in LUMI GRUPPEN AS on December 25, 2024 and sell it today you would earn a total of 13.00 from holding LUMI GRUPPEN AS or generate 12.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DICKS Sporting Goods vs. LUMI GRUPPEN AS
Performance |
| Timeline |
| DICKS Sporting Goods |
| LUMI GRUPPEN AS |
DICKS Sporting and LUMI GRUPPEN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DICKS Sporting and LUMI GRUPPEN
The main advantage of trading using opposite DICKS Sporting and LUMI GRUPPEN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DICKS Sporting position performs unexpectedly, LUMI GRUPPEN 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 LUMI GRUPPEN will offset losses from the drop in LUMI GRUPPEN's long position.| DICKS Sporting vs. REGAL HOTEL INTL | DICKS Sporting vs. INTERCONT HOTELS | DICKS Sporting vs. Choice Hotels International | DICKS Sporting vs. OURGAME INTHOLDL 00005 |
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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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