Correlation Between Winmark and Dicks Sporting
Can any of the company-specific risk be diversified away by investing in both Winmark and Dicks Sporting 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 Dicks Sporting into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Winmark and Dicks Sporting Goods, you can compare the effects of market volatilities on Winmark and Dicks Sporting 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 Dicks Sporting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Winmark and Dicks Sporting.
Diversification Opportunities for Winmark and Dicks Sporting
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Winmark and Dicks is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Winmark and Dicks Sporting Goods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dicks Sporting Goods 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 Dicks Sporting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dicks Sporting Goods has no effect on the direction of Winmark i.e., Winmark and Dicks Sporting go up and down completely randomly.
Pair Corralation between Winmark and Dicks Sporting
Given the investment horizon of 90 days Winmark is expected to generate 1.17 times less return on investment than Dicks Sporting. But when comparing it to its historical volatility, Winmark is 1.35 times less risky than Dicks Sporting. It trades about 0.07 of its potential returns per unit of risk. Dicks Sporting Goods is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 11,340 in Dicks Sporting Goods on August 23, 2024 and sell it today you would earn a total of 8,823 from holding Dicks Sporting Goods or generate 77.8% 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. Dicks Sporting Goods
Performance |
| Timeline |
| Winmark |
| Dicks Sporting Goods |
Winmark and Dicks Sporting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Winmark and Dicks Sporting
The main advantage of trading using opposite Winmark and Dicks Sporting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Winmark position performs unexpectedly, Dicks Sporting 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 Dicks Sporting will offset losses from the drop in Dicks Sporting's long position.| Winmark vs. Mesa Laboratories | Winmark vs. Utah Medical Products | Winmark vs. Weyco Group | Winmark vs. Diamond Hill Investment |
| Dicks Sporting vs. Winmark | Dicks Sporting vs. Arko Corp | Dicks Sporting vs. ABIVAX Socit Anonyme | Dicks Sporting vs. SCOR PK |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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