Correlation Between Winmark and Academy Sports
Can any of the company-specific risk be diversified away by investing in both Winmark 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 Winmark and Academy Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Winmark and Academy Sports Outdoors, you can compare the effects of market volatilities on Winmark 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 Winmark with a short position of Academy Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Winmark and Academy Sports.
Diversification Opportunities for Winmark and Academy Sports
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Winmark and Academy is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Winmark 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 Winmark 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 Winmark 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 Winmark i.e., Winmark and Academy Sports go up and down completely randomly.
Pair Corralation between Winmark and Academy Sports
Given the investment horizon of 90 days Winmark is expected to generate 0.93 times more return on investment than Academy Sports. However, Winmark is 1.08 times less risky than Academy Sports. It trades about 0.31 of its potential returns per unit of risk. Academy Sports Outdoors is currently generating about -0.11 per unit of risk. If you would invest 37,021 in Winmark on August 27, 2024 and sell it today you would earn a total of 5,210 from holding Winmark or generate 14.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Winmark vs. Academy Sports Outdoors
Performance |
| Timeline |
| Winmark |
| Academy Sports Outdoors |
Winmark and Academy Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Winmark and Academy Sports
The main advantage of trading using opposite Winmark and Academy Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Winmark 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.| Winmark vs. Mesa Laboratories | Winmark vs. Utah Medical Products | Winmark vs. Weyco Group | Winmark vs. Diamond Hill Investment |
| Academy Sports vs. Oriental Culture Holding | Academy Sports vs. Hour Loop | Academy Sports vs. Qurate Retail Series | Academy Sports vs. Emerge Commerce |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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