Correlation Between Bausch and Academy Sports
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By analyzing existing cross correlation between Bausch Health Companies and Academy Sports Outdoors, you can compare the effects of market volatilities on Bausch 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 Bausch with a short position of Academy Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch and Academy Sports.
Diversification Opportunities for Bausch and Academy Sports
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bausch and Academy is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Health Companies 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 Bausch 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 Bausch Health Companies 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 Bausch i.e., Bausch and Academy Sports go up and down completely randomly.
Pair Corralation between Bausch and Academy Sports
Assuming the 90 days trading horizon Bausch Health Companies is expected to under-perform the Academy Sports. In addition to that, Bausch is 4.27 times more volatile than Academy Sports Outdoors. It trades about -0.34 of its total potential returns per unit of risk. Academy Sports Outdoors is currently generating about -0.11 per unit of volatility. If you would invest 5,564 in Academy Sports Outdoors on October 21, 2024 and sell it today you would lose (306.00) from holding Academy Sports Outdoors or give up 5.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 47.37% |
| Values | Daily Returns |
Bausch Health Companies vs. Academy Sports Outdoors
Performance |
| Timeline |
| Bausch Health Companies |
| Academy Sports Outdoors |
Bausch and Academy Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bausch and Academy Sports
The main advantage of trading using opposite Bausch and Academy Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bausch 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.The idea behind Bausch Health Companies and Academy Sports Outdoors pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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