Correlation Between DICKS Sporting and FOX P
Can any of the company-specific risk be diversified away by investing in both DICKS Sporting and FOX P 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 FOX P 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 FOX P B, you can compare the effects of market volatilities on DICKS Sporting and FOX P 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 FOX P. Check out your portfolio center. Please also check ongoing floating volatility patterns of DICKS Sporting and FOX P.
Diversification Opportunities for DICKS Sporting and FOX P
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DICKS and FOX is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding DICKS Sporting Goods and FOX P B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FOX P B 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 FOX P. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FOX P B has no effect on the direction of DICKS Sporting i.e., DICKS Sporting and FOX P go up and down completely randomly.
Pair Corralation between DICKS Sporting and FOX P
Assuming the 90 days horizon DICKS Sporting Goods is expected to generate 1.75 times more return on investment than FOX P. However, DICKS Sporting is 1.75 times more volatile than FOX P B. It trades about 0.07 of its potential returns per unit of risk. FOX P B is currently generating about 0.07 per unit of risk. If you would invest 9,756 in DICKS Sporting Goods on September 13, 2024 and sell it today you would earn a total of 10,162 from holding DICKS Sporting Goods or generate 104.16% 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. FOX P B
Performance |
| Timeline |
| DICKS Sporting Goods |
| FOX P B |
DICKS Sporting and FOX P Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DICKS Sporting and FOX P
The main advantage of trading using opposite DICKS Sporting and FOX P positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DICKS Sporting position performs unexpectedly, FOX P 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 FOX P will offset losses from the drop in FOX P's long position.| DICKS Sporting vs. Superior Plus Corp | DICKS Sporting vs. SIVERS SEMICONDUCTORS AB | DICKS Sporting vs. NorAm Drilling AS | DICKS Sporting vs. Norsk Hydro ASA |
| FOX P vs. Universal Insurance Holdings | FOX P vs. HANOVER INSURANCE | FOX P vs. DICKS Sporting Goods | FOX P vs. LIFENET INSURANCE CO |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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