Correlation Between Tyson Foods and Academy Sports
Can any of the company-specific risk be diversified away by investing in both Tyson Foods and Academy 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 Tyson Foods and Academy Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tyson Foods and Academy Sports Outdoors, you can compare the effects of market volatilities on Tyson Foods and Academy 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 Tyson Foods with a short position of Academy Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tyson Foods and Academy Sports.
Diversification Opportunities for Tyson Foods and Academy Sports
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tyson and Academy is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Tyson Foods and Academy Sports Outdoors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Academy Sports Outdoors and Tyson Foods 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 Tyson Foods are associated (or correlated) with Academy Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Academy Sports Outdoors has no effect on the direction of Tyson Foods i.e., Tyson Foods and Academy Sports go up and down completely randomly.
Pair Corralation between Tyson Foods and Academy Sports
Considering the 90-day investment horizon Tyson Foods is expected to generate 0.76 times more return on investment than Academy Sports. However, Tyson Foods is 1.32 times less risky than Academy Sports. It trades about 0.33 of its potential returns per unit of risk. Academy Sports Outdoors is currently generating about -0.14 per unit of risk. If you would invest 5,787 in Tyson Foods on September 3, 2024 and sell it today you would earn a total of 663.00 from holding Tyson Foods or generate 11.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tyson Foods vs. Academy Sports Outdoors
Performance |
| Timeline |
| Tyson Foods |
| Academy Sports Outdoors |
Tyson Foods and Academy Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tyson Foods and Academy Sports
The main advantage of trading using opposite Tyson Foods and Academy Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tyson Foods position performs unexpectedly, Academy 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 Academy Sports will offset losses from the drop in Academy Sports' long position.| Tyson Foods vs. Bunge Limited | Tyson Foods vs. Cal Maine Foods | Tyson Foods vs. Dole PLC | Tyson Foods vs. Adecoagro SA |
| Academy Sports vs. Williams Sonoma | Academy Sports vs. AutoZone | Academy Sports vs. Ulta Beauty | Academy Sports vs. Best Buy Co |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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