Correlation Between DICKS Sporting and Sqs Software

Can any of the company-specific risk be diversified away by investing in both DICKS Sporting and Sqs Software 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 Sqs Software 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 Sqs Software Quality, you can compare the effects of market volatilities on DICKS Sporting and Sqs Software 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 Sqs Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of DICKS Sporting and Sqs Software.

Diversification Opportunities for DICKS Sporting and Sqs Software

-0.84

Correlation Coefficient

DICKS Sporting  Sqs Software

Pay attention - limited upside

The 3 months correlation between DICKS and Sqs is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding DICKS Sporting Goods and Sqs Software Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sqs Software Quality 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 Sqs Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sqs Software Quality has no effect on the direction of DICKS Sporting i.e., DICKS Sporting and Sqs Software go up and down completely randomly.

Pair Corralation between DICKS Sporting and Sqs Software

Assuming the 90 days horizon DICKS Sporting Goods is expected to under-perform the Sqs Software. But the stock apears to be less risky and, when comparing its historical volatility, DICKS Sporting Goods is 1.38 times less risky than Sqs Software. The stock trades about -0.08 of its potential returns per unit of risk. The Sqs Software Quality is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  327.00  in Sqs Software Quality on December 21, 2024 and sell it today you would earn a total of  93.00  from holding Sqs Software Quality or generate 28.44% return on investment over 90 days.

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

DICKS Sporting Goods  vs.  Sqs Software Quality

DICKS Sporting Goods

Risk-Adjusted Performance

Very Weak

Over the last 90 days DICKS Sporting Goods has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Sqs Software Quality

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sqs Software Quality are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Sqs Software unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with DICKS Sporting and Sqs Software

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

The idea behind DICKS Sporting Goods and Sqs Software Quality 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.