Correlation Between Childrens Place and Hibbett Sports
Can any of the company-specific risk be diversified away by investing in both Childrens Place and Hibbett 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 Childrens Place and Hibbett Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Childrens Place and Hibbett Sports, you can compare the effects of market volatilities on Childrens Place and Hibbett 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 Childrens Place with a short position of Hibbett Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Childrens Place and Hibbett Sports.
Diversification Opportunities for Childrens Place and Hibbett Sports
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Childrens and Hibbett is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Childrens Place and Hibbett Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hibbett Sports and Childrens Place 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 Childrens Place are associated (or correlated) with Hibbett Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hibbett Sports has no effect on the direction of Childrens Place i.e., Childrens Place and Hibbett Sports go up and down completely randomly.
Pair Corralation between Childrens Place and Hibbett Sports
Given the investment horizon of 90 days Childrens Place is expected to generate 2.95 times more return on investment than Hibbett Sports. However, Childrens Place is 2.95 times more volatile than Hibbett Sports. It trades about 0.02 of its potential returns per unit of risk. Hibbett Sports is currently generating about 0.04 per unit of risk. If you would invest 3,563 in Childrens Place on August 27, 2024 and sell it today you would lose (1,953) from holding Childrens Place or give up 54.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 82.66% |
| Values | Daily Returns |
Childrens Place vs. Hibbett Sports
Performance |
| Timeline |
| Childrens Place |
| Hibbett Sports |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Childrens Place and Hibbett Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Childrens Place and Hibbett Sports
The main advantage of trading using opposite Childrens Place and Hibbett Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Childrens Place position performs unexpectedly, Hibbett 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 Hibbett Sports will offset losses from the drop in Hibbett Sports' long position.| Childrens Place vs. Ross Stores | Childrens Place vs. Buckle Inc | Childrens Place vs. Guess Inc | Childrens Place vs. Abercrombie Fitch |
| Hibbett Sports vs. Big 5 Sporting | Hibbett Sports vs. Genesco | Hibbett Sports vs. Shoe Carnival | Hibbett Sports vs. MarineMax |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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