Correlation Between Academy Sports and Container Store

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

Diversification Opportunities for Academy Sports and Container Store

0.0

Correlation Coefficient

Academy Sports  Container Store

Pay attention - limited upside

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

Pair Corralation between Academy Sports and Container Store

If you would invest  5,833  in Academy Sports Outdoors on November 19, 2024 and sell it today you would lose (477.00) from holding Academy Sports Outdoors or give up 8.18% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Academy Sports Outdoors  vs.  Container Store Group

Academy Sports Outdoors

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Academy Sports Outdoors are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Academy Sports displayed solid returns over the last few months and may actually be approaching a breakup point.

Container Store Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Container Store Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Container Store is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Academy Sports and Container Store

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

The idea behind Academy Sports Outdoors and Container Store Group 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.

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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..