Correlation Between SIGNA Sports and IMedia Brands
Can any of the company-specific risk be diversified away by investing in both SIGNA Sports and IMedia Brands 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 SIGNA Sports and IMedia Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SIGNA Sports United and IMedia Brands, you can compare the effects of market volatilities on SIGNA Sports and IMedia Brands 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 SIGNA Sports with a short position of IMedia Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIGNA Sports and IMedia Brands.
Diversification Opportunities for SIGNA Sports and IMedia Brands
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SIGNA and IMedia is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding SIGNA Sports United and IMedia Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IMedia Brands and SIGNA 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 SIGNA Sports United are associated (or correlated) with IMedia Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IMedia Brands has no effect on the direction of SIGNA Sports i.e., SIGNA Sports and IMedia Brands go up and down completely randomly.
Pair Corralation between SIGNA Sports and IMedia Brands
Considering the 90-day investment horizon SIGNA Sports United is expected to generate 0.33 times more return on investment than IMedia Brands. However, SIGNA Sports United is 3.03 times less risky than IMedia Brands. It trades about -0.04 of its potential returns per unit of risk. IMedia Brands is currently generating about -0.29 per unit of risk. If you would invest 305.00 in SIGNA Sports United on August 31, 2024 and sell it today you would lose (32.00) from holding SIGNA Sports United or give up 10.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 96.88% |
| Values | Daily Returns |
SIGNA Sports United vs. IMedia Brands
Performance |
| Timeline |
| SIGNA Sports United |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| IMedia Brands |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SIGNA Sports and IMedia Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIGNA Sports and IMedia Brands
The main advantage of trading using opposite SIGNA Sports and IMedia Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIGNA Sports position performs unexpectedly, IMedia Brands 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 IMedia Brands will offset losses from the drop in IMedia Brands' long position.| SIGNA Sports vs. Sally Beauty Holdings | SIGNA Sports vs. National Vision Holdings | SIGNA Sports vs. MarineMax | SIGNA Sports vs. Caseys General Stores |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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