Correlation Between GameStop Corp and Academy Sports
Can any of the company-specific risk be diversified away by investing in both GameStop Corp 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 GameStop Corp and Academy Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GameStop Corp and Academy Sports Outdoors, you can compare the effects of market volatilities on GameStop Corp 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 GameStop Corp with a short position of Academy Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of GameStop Corp and Academy Sports.
Diversification Opportunities for GameStop Corp and Academy Sports
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GameStop and Academy is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding GameStop Corp 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 GameStop Corp 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 GameStop Corp 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 GameStop Corp i.e., GameStop Corp and Academy Sports go up and down completely randomly.
Pair Corralation between GameStop Corp and Academy Sports
Considering the 90-day investment horizon GameStop Corp is expected to generate 1.47 times more return on investment than Academy Sports. However, GameStop Corp is 1.47 times more volatile than Academy Sports Outdoors. It trades about 0.39 of its potential returns per unit of risk. Academy Sports Outdoors is currently generating about -0.05 per unit of risk. If you would invest 2,218 in GameStop Corp on September 1, 2024 and sell it today you would earn a total of 687.00 from holding GameStop Corp or generate 30.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GameStop Corp vs. Academy Sports Outdoors
Performance |
| Timeline |
| GameStop Corp |
| Academy Sports Outdoors |
GameStop Corp and Academy Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GameStop Corp and Academy Sports
The main advantage of trading using opposite GameStop Corp and Academy Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GameStop Corp 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.| GameStop Corp vs. RH | GameStop Corp vs. Dicks Sporting Goods | GameStop Corp vs. Best Buy Co | GameStop Corp vs. AutoZone |
| Academy Sports vs. Alcon AG | Academy Sports vs. The Cooper Companies, | Academy Sports vs. AngioDynamics | Academy Sports vs. AptarGroup |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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