Correlation Between Hibbett Sports and Destination
Can any of the company-specific risk be diversified away by investing in both Hibbett Sports and Destination 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 Hibbett Sports and Destination into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hibbett Sports and Destination XL Group, you can compare the effects of market volatilities on Hibbett Sports and Destination 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 Hibbett Sports with a short position of Destination. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hibbett Sports and Destination.
Diversification Opportunities for Hibbett Sports and Destination
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hibbett and Destination is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Hibbett Sports and Destination XL Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Destination XL Group and Hibbett Sports 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 Hibbett Sports are associated (or correlated) with Destination. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Destination XL Group has no effect on the direction of Hibbett Sports i.e., Hibbett Sports and Destination go up and down completely randomly.
Pair Corralation between Hibbett Sports and Destination
Given the investment horizon of 90 days Hibbett Sports is expected to generate 1.05 times more return on investment than Destination. However, Hibbett Sports is 1.05 times more volatile than Destination XL Group. It trades about 0.04 of its potential returns per unit of risk. Destination XL Group is currently generating about -0.06 per unit of risk. If you would invest 6,402 in Hibbett Sports on August 27, 2024 and sell it today you would earn a total of 2,347 from holding Hibbett Sports or generate 36.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 82.66% |
| Values | Daily Returns |
Hibbett Sports vs. Destination XL Group
Performance |
| Timeline |
| Hibbett Sports |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Destination XL Group |
Hibbett Sports and Destination Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hibbett Sports and Destination
The main advantage of trading using opposite Hibbett Sports and Destination positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hibbett Sports position performs unexpectedly, Destination 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 Destination will offset losses from the drop in Destination's long position.| Hibbett Sports vs. Big 5 Sporting | Hibbett Sports vs. Genesco | Hibbett Sports vs. Shoe Carnival | Hibbett Sports vs. MarineMax |
| Destination vs. Cato Corporation | Destination vs. Zumiez Inc | Destination vs. Tillys Inc | Destination vs. Duluth Holdings |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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