Correlation Between Sportsmans and Bath Body
Can any of the company-specific risk be diversified away by investing in both Sportsmans and Bath Body 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 Sportsmans and Bath Body into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sportsmans and Bath Body Works, you can compare the effects of market volatilities on Sportsmans and Bath Body 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 Sportsmans with a short position of Bath Body. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sportsmans and Bath Body.
Diversification Opportunities for Sportsmans and Bath Body
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sportsmans and Bath is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Sportsmans and Bath Body Works in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bath Body Works and Sportsmans 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 Sportsmans are associated (or correlated) with Bath Body. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bath Body Works has no effect on the direction of Sportsmans i.e., Sportsmans and Bath Body go up and down completely randomly.
Pair Corralation between Sportsmans and Bath Body
Given the investment horizon of 90 days Sportsmans is expected to under-perform the Bath Body. In addition to that, Sportsmans is 3.5 times more volatile than Bath Body Works. It trades about -0.1 of its total potential returns per unit of risk. Bath Body Works is currently generating about -0.19 per unit of volatility. If you would invest 3,858 in Bath Body Works on October 20, 2024 and sell it today you would lose (183.00) from holding Bath Body Works or give up 4.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sportsmans vs. Bath Body Works
Performance |
| Timeline |
| Sportsmans |
| Bath Body Works |
Sportsmans and Bath Body Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sportsmans and Bath Body
The main advantage of trading using opposite Sportsmans and Bath Body positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sportsmans position performs unexpectedly, Bath Body 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 Bath Body will offset losses from the drop in Bath Body's long position.| Sportsmans vs. MarineMax | Sportsmans vs. Build A Bear Workshop | Sportsmans vs. Leslies | Sportsmans vs. Sally Beauty Holdings |
| Bath Body vs. Sportsmans | Bath Body vs. Big 5 Sporting | Bath Body vs. Williams Sonoma | Bath Body vs. Dicks Sporting Goods |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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