Correlation Between Academy Sports and 020002AJ0

Can any of the company-specific risk be diversified away by investing in both Academy Sports and 020002AJ0 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 020002AJ0 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 ALL 69 15 MAY 38, you can compare the effects of market volatilities on Academy Sports and 020002AJ0 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 020002AJ0. Check out your portfolio center. Please also check ongoing floating volatility patterns of Academy Sports and 020002AJ0.

Diversification Opportunities for Academy Sports and 020002AJ0

0.51

Correlation Coefficient

Academy Sports  020002AJ0

Very weak diversification

The 3 months correlation between Academy and 020002AJ0 is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Academy Sports Outdoors and ALL 69 15 MAY 38 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALL 69 15 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 020002AJ0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALL 69 15 has no effect on the direction of Academy Sports i.e., Academy Sports and 020002AJ0 go up and down completely randomly.

Pair Corralation between Academy Sports and 020002AJ0

Considering the 90-day investment horizon Academy Sports Outdoors is expected to under-perform the 020002AJ0. In addition to that, Academy Sports is 2.14 times more volatile than ALL 69 15 MAY 38. It trades about -0.12 of its total potential returns per unit of risk. ALL 69 15 MAY 38 is currently generating about 0.04 per unit of volatility. If you would invest  11,443  in ALL 69 15 MAY 38 on December 25, 2024 and sell it today you would earn a total of  183.00  from holding ALL 69 15 MAY 38 or generate 1.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	63.33%
Values	Daily Returns

Academy Sports Outdoors  vs.  ALL 69 15 MAY 38

Academy Sports Outdoors

Risk-Adjusted Performance

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 unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

ALL 69 15

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ALL 69 15 MAY 38 are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 020002AJ0 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Academy Sports and 020002AJ0

The main advantage of trading using opposite Academy Sports and 020002AJ0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Academy Sports position performs unexpectedly, 020002AJ0 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 020002AJ0 will offset losses from the drop in 020002AJ0's long position.

The idea behind Academy Sports Outdoors and ALL 69 15 MAY 38 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.