Correlation Between DICKS Sporting and SPORT LISBOA
Can any of the company-specific risk be diversified away by investing in both DICKS Sporting and SPORT LISBOA 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 SPORT LISBOA 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 SPORT LISBOA E, you can compare the effects of market volatilities on DICKS Sporting and SPORT LISBOA 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 SPORT LISBOA. Check out your portfolio center. Please also check ongoing floating volatility patterns of DICKS Sporting and SPORT LISBOA.
Diversification Opportunities for DICKS Sporting and SPORT LISBOA
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DICKS and SPORT is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding DICKS Sporting Goods and SPORT LISBOA E in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPORT LISBOA E 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 SPORT LISBOA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPORT LISBOA E has no effect on the direction of DICKS Sporting i.e., DICKS Sporting and SPORT LISBOA go up and down completely randomly.
Pair Corralation between DICKS Sporting and SPORT LISBOA
Assuming the 90 days horizon DICKS Sporting Goods is expected to generate 1.16 times more return on investment than SPORT LISBOA. However, DICKS Sporting is 1.16 times more volatile than SPORT LISBOA E. It trades about 0.21 of its potential returns per unit of risk. SPORT LISBOA E is currently generating about 0.05 per unit of risk. If you would invest 18,754 in DICKS Sporting Goods on August 29, 2024 and sell it today you would earn a total of 2,666 from holding DICKS Sporting Goods or generate 14.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DICKS Sporting Goods vs. SPORT LISBOA E
Performance |
| Timeline |
| DICKS Sporting Goods |
| SPORT LISBOA E |
DICKS Sporting and SPORT LISBOA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DICKS Sporting and SPORT LISBOA
The main advantage of trading using opposite DICKS Sporting and SPORT LISBOA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DICKS Sporting position performs unexpectedly, SPORT LISBOA 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 SPORT LISBOA will offset losses from the drop in SPORT LISBOA'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 |
| SPORT LISBOA vs. The Walt Disney | SPORT LISBOA vs. Superior Plus Corp | SPORT LISBOA vs. NMI Holdings | SPORT LISBOA vs. Origin Agritech |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |