Correlation Between DICKS Sporting and PENN NATL
Can any of the company-specific risk be diversified away by investing in both DICKS Sporting and PENN NATL 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 PENN NATL 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 PENN NATL GAMING, you can compare the effects of market volatilities on DICKS Sporting and PENN NATL 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 PENN NATL. Check out your portfolio center. Please also check ongoing floating volatility patterns of DICKS Sporting and PENN NATL.
Diversification Opportunities for DICKS Sporting and PENN NATL
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between DICKS and PENN is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding DICKS Sporting Goods and PENN NATL GAMING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PENN NATL GAMING 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 PENN NATL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PENN NATL GAMING has no effect on the direction of DICKS Sporting i.e., DICKS Sporting and PENN NATL go up and down completely randomly.
Pair Corralation between DICKS Sporting and PENN NATL
Assuming the 90 days horizon DICKS Sporting Goods is expected to generate 0.82 times more return on investment than PENN NATL. However, DICKS Sporting Goods is 1.23 times less risky than PENN NATL. It trades about 0.06 of its potential returns per unit of risk. PENN NATL GAMING is currently generating about -0.01 per unit of risk. If you would invest 10,976 in DICKS Sporting Goods on October 18, 2024 and sell it today you would earn a total of 10,114 from holding DICKS Sporting Goods or generate 92.15% 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. PENN NATL GAMING
Performance |
| Timeline |
| DICKS Sporting Goods |
| PENN NATL GAMING |
DICKS Sporting and PENN NATL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DICKS Sporting and PENN NATL
The main advantage of trading using opposite DICKS Sporting and PENN NATL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DICKS Sporting position performs unexpectedly, PENN NATL 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 PENN NATL will offset losses from the drop in PENN NATL's long position.| DICKS Sporting vs. Flutter Entertainment PLC | DICKS Sporting vs. PARKEN Sport Entertainment | DICKS Sporting vs. SQUIRREL MEDIA SA | DICKS Sporting vs. Nexstar Media Group |
| PENN NATL vs. NTG Nordic Transport | PENN NATL vs. DICKS Sporting Goods | PENN NATL vs. TYSON FOODS A | PENN NATL vs. Cal Maine Foods |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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