Correlation Between Academy Sports and Pintec Technology

Can any of the company-specific risk be diversified away by investing in both Academy Sports and Pintec Technology 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 Pintec Technology 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 Pintec Technology Holdings, you can compare the effects of market volatilities on Academy Sports and Pintec Technology 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 Pintec Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Academy Sports and Pintec Technology.

Diversification Opportunities for Academy Sports and Pintec Technology

0.47

Correlation Coefficient

Academy Sports  Pintec Technology

Very weak diversification

The 3 months correlation between Academy and Pintec is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Academy Sports Outdoors and Pintec Technology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pintec Technology 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 Pintec Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pintec Technology has no effect on the direction of Academy Sports i.e., Academy Sports and Pintec Technology go up and down completely randomly.

Pair Corralation between Academy Sports and Pintec Technology

Considering the 90-day investment horizon Academy Sports Outdoors is expected to under-perform the Pintec Technology. But the stock apears to be less risky and, when comparing its historical volatility, Academy Sports Outdoors is 2.08 times less risky than Pintec Technology. The stock trades about -0.05 of its potential returns per unit of risk. The Pintec Technology Holdings is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  103.00  in Pintec Technology Holdings on September 16, 2024 and sell it today you would lose (13.00) from holding Pintec Technology Holdings or give up 12.62% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Academy Sports Outdoors  vs.  Pintec Technology Holdings

Academy Sports Outdoors

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Academy Sports Outdoors has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pintec Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pintec Technology Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Academy Sports and Pintec Technology

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

The idea behind Academy Sports Outdoors and Pintec Technology Holdings 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.