Correlation Between DICKS Sporting and Big 5
Can any of the company-specific risk be diversified away by investing in both DICKS Sporting and Big 5 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 Big 5 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 Big 5 Sporting, you can compare the effects of market volatilities on DICKS Sporting and Big 5 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 Big 5. Check out your portfolio center. Please also check ongoing floating volatility patterns of DICKS Sporting and Big 5.
Diversification Opportunities for DICKS Sporting and Big 5
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between DICKS and Big is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding DICKS Sporting Goods and Big 5 Sporting in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Big 5 Sporting 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 Big 5. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Big 5 Sporting has no effect on the direction of DICKS Sporting i.e., DICKS Sporting and Big 5 go up and down completely randomly.
Pair Corralation between DICKS Sporting and Big 5
Assuming the 90 days horizon DICKS Sporting Goods is expected to generate 0.55 times more return on investment than Big 5. However, DICKS Sporting Goods is 1.81 times less risky than Big 5. It trades about 0.05 of its potential returns per unit of risk. Big 5 Sporting is currently generating about -0.11 per unit of risk. If you would invest 18,754 in DICKS Sporting Goods on August 28, 2024 and sell it today you would earn a total of 404.00 from holding DICKS Sporting Goods or generate 2.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
DICKS Sporting Goods vs. Big 5 Sporting
Performance |
| Timeline |
| DICKS Sporting Goods |
| Big 5 Sporting |
DICKS Sporting and Big 5 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DICKS Sporting and Big 5
The main advantage of trading using opposite DICKS Sporting and Big 5 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DICKS Sporting position performs unexpectedly, Big 5 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 Big 5 will offset losses from the drop in Big 5's long position.| DICKS Sporting vs. Astral Foods Limited | DICKS Sporting vs. JJ SNACK FOODS | DICKS Sporting vs. Tyson Foods | DICKS Sporting vs. National Health Investors |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |