Correlation Between Academy Sports and Here Media

Can any of the company-specific risk be diversified away by investing in both Academy Sports and Here Media 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 Academy Sports and Here Media into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Academy Sports Outdoors and Here Media, you can compare the effects of market volatilities on Academy Sports and Here Media 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 Academy Sports with a short position of Here Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Academy Sports and Here Media.

Diversification Opportunities for Academy Sports and Here Media

0.0

Correlation Coefficient

Academy Sports  Here Media

Pay attention - limited upside

The 3 months correlation between Academy and Here is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Academy Sports Outdoors and Here Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Here Media and Academy 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 Academy Sports Outdoors are associated (or correlated) with Here Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Here Media has no effect on the direction of Academy Sports i.e., Academy Sports and Here Media go up and down completely randomly.

Pair Corralation between Academy Sports and Here Media

Considering the 90-day investment horizon Academy Sports is expected to generate 4.24 times less return on investment than Here Media. But when comparing it to its historical volatility, Academy Sports Outdoors is 1.89 times less risky than Here Media. It trades about 0.02 of its potential returns per unit of risk. Here Media is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  0.01  in Here Media on October 11, 2024 and sell it today you would earn a total of  0.01  from holding Here Media or generate 100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Academy Sports Outdoors  vs.  Here Media

Academy Sports Outdoors

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Academy Sports Outdoors are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Academy Sports may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Here Media

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Here Media has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward indicators, Here Media is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Academy Sports and Here Media

The main advantage of trading using opposite Academy Sports and Here Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Academy Sports position performs unexpectedly, Here Media 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 Here Media will offset losses from the drop in Here Media's long position.

The idea behind Academy Sports Outdoors and Here Media 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.

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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..