Correlation Between Academy Sports and 90932LAH0

Can any of the company-specific risk be diversified away by investing in both Academy Sports and 90932LAH0 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 90932LAH0 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 US90932LAH06, you can compare the effects of market volatilities on Academy Sports and 90932LAH0 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 90932LAH0. Check out your portfolio center. Please also check ongoing floating volatility patterns of Academy Sports and 90932LAH0.

Diversification Opportunities for Academy Sports and 90932LAH0

-0.44

Correlation Coefficient

Academy Sports  90932LAH0

Very good diversification

The 3 months correlation between Academy and 90932LAH0 is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Academy Sports Outdoors and US90932LAH06 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US90932LAH06 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 90932LAH0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US90932LAH06 has no effect on the direction of Academy Sports i.e., Academy Sports and 90932LAH0 go up and down completely randomly.

Pair Corralation between Academy Sports and 90932LAH0

Considering the 90-day investment horizon Academy Sports Outdoors is expected to generate 5.11 times more return on investment than 90932LAH0. However, Academy Sports is 5.11 times more volatile than US90932LAH06. It trades about 0.18 of its potential returns per unit of risk. US90932LAH06 is currently generating about 0.05 per unit of risk. If you would invest  5,063  in Academy Sports Outdoors on October 11, 2024 and sell it today you would earn a total of  823.00  from holding Academy Sports Outdoors or generate 16.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.12%
Values	Daily Returns

Academy Sports Outdoors  vs.  US90932LAH06

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.

US90932LAH06

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in US90932LAH06 are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 90932LAH0 is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Academy Sports and 90932LAH0

The main advantage of trading using opposite Academy Sports and 90932LAH0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Academy Sports position performs unexpectedly, 90932LAH0 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 90932LAH0 will offset losses from the drop in 90932LAH0's long position.

The idea behind Academy Sports Outdoors and US90932LAH06 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.