Correlation Between Sportsmans and Sally Beauty
Can any of the company-specific risk be diversified away by investing in both Sportsmans and Sally Beauty 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 Sally Beauty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sportsmans and Sally Beauty Holdings, you can compare the effects of market volatilities on Sportsmans and Sally Beauty 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 Sally Beauty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sportsmans and Sally Beauty.
Diversification Opportunities for Sportsmans and Sally Beauty
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sportsmans and Sally is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Sportsmans and Sally Beauty Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sally Beauty Holdings 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 Sally Beauty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sally Beauty Holdings has no effect on the direction of Sportsmans i.e., Sportsmans and Sally Beauty go up and down completely randomly.
Pair Corralation between Sportsmans and Sally Beauty
Given the investment horizon of 90 days Sportsmans is expected to generate 1.91 times more return on investment than Sally Beauty. However, Sportsmans is 1.91 times more volatile than Sally Beauty Holdings. It trades about -0.02 of its potential returns per unit of risk. Sally Beauty Holdings is currently generating about -0.08 per unit of risk. If you would invest 255.00 in Sportsmans on October 31, 2024 and sell it today you would lose (40.00) from holding Sportsmans or give up 15.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sportsmans vs. Sally Beauty Holdings
Performance |
| Timeline |
| Sportsmans |
| Sally Beauty Holdings |
Sportsmans and Sally Beauty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sportsmans and Sally Beauty
The main advantage of trading using opposite Sportsmans and Sally Beauty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sportsmans position performs unexpectedly, Sally Beauty 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 Sally Beauty will offset losses from the drop in Sally Beauty's long position.| Sportsmans vs. MarineMax | Sportsmans vs. Build A Bear Workshop | Sportsmans vs. Leslies | Sportsmans vs. Sally Beauty Holdings |
| Sally Beauty vs. Leslies | Sally Beauty vs. National Vision Holdings | Sally Beauty vs. Sportsmans | Sally Beauty 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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