Correlation Between Evgo and Academy Sports
Can any of the company-specific risk be diversified away by investing in both Evgo and Academy Sports 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 Evgo and Academy Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evgo Inc and Academy Sports Outdoors, you can compare the effects of market volatilities on Evgo and Academy Sports 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 Evgo with a short position of Academy Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evgo and Academy Sports.
Diversification Opportunities for Evgo and Academy Sports
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Evgo and Academy is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Evgo Inc and Academy Sports Outdoors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Academy Sports Outdoors and Evgo 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 Evgo Inc are associated (or correlated) with Academy Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Academy Sports Outdoors has no effect on the direction of Evgo i.e., Evgo and Academy Sports go up and down completely randomly.
Pair Corralation between Evgo and Academy Sports
Given the investment horizon of 90 days Evgo Inc is expected to generate 3.24 times more return on investment than Academy Sports. However, Evgo is 3.24 times more volatile than Academy Sports Outdoors. It trades about 0.16 of its potential returns per unit of risk. Academy Sports Outdoors is currently generating about -0.03 per unit of risk. If you would invest 194.00 in Evgo Inc on September 2, 2024 and sell it today you would earn a total of 457.00 from holding Evgo Inc or generate 235.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evgo Inc vs. Academy Sports Outdoors
Performance |
| Timeline |
| Evgo Inc |
| Academy Sports Outdoors |
Evgo and Academy Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evgo and Academy Sports
The main advantage of trading using opposite Evgo and Academy Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evgo position performs unexpectedly, Academy Sports 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 Academy Sports will offset losses from the drop in Academy Sports' long position.The idea behind Evgo Inc and Academy Sports Outdoors pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Academy Sports vs. Williams Sonoma | Academy Sports vs. AutoZone | Academy Sports vs. Ulta Beauty | Academy Sports vs. Best Buy 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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