Correlation Between Evertz Technologies and Academy Sports

Can any of the company-specific risk be diversified away by investing in both Evertz Technologies and Academy Sports 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 Evertz Technologies and Academy Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Evertz Technologies Limited and Academy Sports Outdoors, you can compare the effects of market volatilities on Evertz Technologies and Academy Sports 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 Evertz Technologies with a short position of Academy Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evertz Technologies and Academy Sports.

Diversification Opportunities for Evertz Technologies and Academy Sports

-0.55

Correlation Coefficient

Evertz Technologies  Academy Sports

Excellent diversification

The 3 months correlation between Evertz and Academy is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Evertz Technologies Limited and Academy Sports Outdoors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Academy Sports Outdoors and Evertz Technologies 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 Evertz Technologies Limited are associated (or correlated) with Academy Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Academy Sports Outdoors has no effect on the direction of Evertz Technologies i.e., Evertz Technologies and Academy Sports go up and down completely randomly.

Pair Corralation between Evertz Technologies and Academy Sports

Assuming the 90 days horizon Evertz Technologies Limited is expected to under-perform the Academy Sports. But the pink sheet apears to be less risky and, when comparing its historical volatility, Evertz Technologies Limited is 2.32 times less risky than Academy Sports. The pink sheet trades about -0.06 of its potential returns per unit of risk. The Academy Sports Outdoors is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  5,487  in Academy Sports Outdoors on October 15, 2024 and sell it today you would earn a total of  61.00  from holding Academy Sports Outdoors or generate 1.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	94.74%
Values	Daily Returns

Evertz Technologies Limited  vs.  Academy Sports Outdoors

Evertz Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Evertz Technologies Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Evertz Technologies is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Academy Sports Outdoors

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Academy Sports Outdoors are ranked lower than 3 (%) 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.

Pair Trading with Evertz Technologies and Academy Sports

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

The idea behind Evertz Technologies Limited and Academy Sports Outdoors 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.