Correlation Between Hibbett Sports and Urban Outfitters
Can any of the company-specific risk be diversified away by investing in both Hibbett Sports and Urban Outfitters 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 Urban Outfitters into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hibbett Sports and Urban Outfitters, you can compare the effects of market volatilities on Hibbett Sports and Urban Outfitters 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 Urban Outfitters. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hibbett Sports and Urban Outfitters.
Diversification Opportunities for Hibbett Sports and Urban Outfitters
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hibbett and Urban is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Hibbett Sports and Urban Outfitters in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Urban Outfitters 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 Urban Outfitters. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Urban Outfitters has no effect on the direction of Hibbett Sports i.e., Hibbett Sports and Urban Outfitters go up and down completely randomly.
Pair Corralation between Hibbett Sports and Urban Outfitters
Given the investment horizon of 90 days Hibbett Sports is expected to generate 1.4 times less return on investment than Urban Outfitters. In addition to that, Hibbett Sports is 1.11 times more volatile than Urban Outfitters. It trades about 0.04 of its total potential returns per unit of risk. Urban Outfitters is currently generating about 0.07 per unit of volatility. If you would invest 2,654 in Urban Outfitters on October 20, 2024 and sell it today you would earn a total of 2,847 from holding Urban Outfitters or generate 107.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 75.56% |
| Values | Daily Returns |
Hibbett Sports vs. Urban Outfitters
Performance |
| Timeline |
| Hibbett Sports |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Urban Outfitters |
Hibbett Sports and Urban Outfitters Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hibbett Sports and Urban Outfitters
The main advantage of trading using opposite Hibbett Sports and Urban Outfitters positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hibbett Sports position performs unexpectedly, Urban Outfitters 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 Urban Outfitters will offset losses from the drop in Urban Outfitters' long position.| Hibbett Sports vs. Big 5 Sporting | Hibbett Sports vs. Genesco | Hibbett Sports vs. Shoe Carnival | Hibbett Sports vs. MarineMax |
| Urban Outfitters vs. American Eagle Outfitters | Urban Outfitters vs. Foot Locker | Urban Outfitters vs. Childrens Place | Urban Outfitters vs. Abercrombie Fitch |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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