Correlation Between Joann and Sportsmans

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

By analyzing existing cross correlation between Joann Inc and Sportsmans, you can compare the effects of market volatilities on Joann and Sportsmans 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 Joann with a short position of Sportsmans. Check out your portfolio center. Please also check ongoing floating volatility patterns of Joann and Sportsmans.

Diversification Opportunities for Joann and Sportsmans

0.8

Correlation Coefficient

Joann  Sportsmans

Very poor diversification

The 3 months correlation between Joann and Sportsmans is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Joann Inc and Sportsmans in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sportsmans and Joann 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 Joann Inc are associated (or correlated) with Sportsmans. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sportsmans has no effect on the direction of Joann i.e., Joann and Sportsmans go up and down completely randomly.

Pair Corralation between Joann and Sportsmans

If you would invest  223.00  in Sportsmans on September 29, 2024 and sell it today you would earn a total of  42.00  from holding Sportsmans or generate 18.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	0.79%
Values	Daily Returns

Joann Inc  vs.  Sportsmans

Joann Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Joann Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Joann is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Sportsmans

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sportsmans are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, Sportsmans may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Joann and Sportsmans

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

The idea behind Joann Inc and Sportsmans 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.