Correlation Between DICKS Sporting and AGRICULTBK HADR/25

Can any of the company-specific risk be diversified away by investing in both DICKS Sporting and AGRICULTBK HADR/25 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 DICKS Sporting and AGRICULTBK HADR/25 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between DICKS Sporting Goods and AGRICULTBK HADR25 YC, you can compare the effects of market volatilities on DICKS Sporting and AGRICULTBK HADR/25 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 DICKS Sporting with a short position of AGRICULTBK HADR/25. Check out your portfolio center. Please also check ongoing floating volatility patterns of DICKS Sporting and AGRICULTBK HADR/25.

Diversification Opportunities for DICKS Sporting and AGRICULTBK HADR/25

0.53

Correlation Coefficient

DICKS Sporting  AGRICULTBK HADR/25

Very weak diversification

The 3 months correlation between DICKS and AGRICULTBK is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding DICKS Sporting Goods and AGRICULTBK HADR25 YC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGRICULTBK HADR/25 and DICKS Sporting 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 DICKS Sporting Goods are associated (or correlated) with AGRICULTBK HADR/25. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGRICULTBK HADR/25 has no effect on the direction of DICKS Sporting i.e., DICKS Sporting and AGRICULTBK HADR/25 go up and down completely randomly.

Pair Corralation between DICKS Sporting and AGRICULTBK HADR/25

Assuming the 90 days horizon DICKS Sporting is expected to generate 4.25 times less return on investment than AGRICULTBK HADR/25. In addition to that, DICKS Sporting is 1.19 times more volatile than AGRICULTBK HADR25 YC. It trades about 0.03 of its total potential returns per unit of risk. AGRICULTBK HADR25 YC is currently generating about 0.16 per unit of volatility. If you would invest  939.00  in AGRICULTBK HADR25 YC on December 5, 2024 and sell it today you would earn a total of  451.00  from holding AGRICULTBK HADR25 YC or generate 48.03% return on investment over 90 days.

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

DICKS Sporting Goods  vs.  AGRICULTBK HADR25 YC

DICKS Sporting Goods

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in DICKS Sporting Goods are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, DICKS Sporting may actually be approaching a critical reversion point that can send shares even higher in April 2025.

AGRICULTBK HADR/25

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AGRICULTBK HADR25 YC are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, AGRICULTBK HADR/25 reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with DICKS Sporting and AGRICULTBK HADR/25

The main advantage of trading using opposite DICKS Sporting and AGRICULTBK HADR/25 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DICKS Sporting position performs unexpectedly, AGRICULTBK HADR/25 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 AGRICULTBK HADR/25 will offset losses from the drop in AGRICULTBK HADR/25's long position.

The idea behind DICKS Sporting Goods and AGRICULTBK HADR25 YC 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.