Correlation Between MOGU and Academy Sports

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

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

Diversification Opportunities for MOGU and Academy Sports

0.35

Correlation Coefficient

MOGU  Academy Sports

Weak diversification

The 3 months correlation between MOGU and Academy is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding MOGU Inc 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 MOGU 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 MOGU Inc 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 MOGU i.e., MOGU and Academy Sports go up and down completely randomly.

Pair Corralation between MOGU and Academy Sports

Given the investment horizon of 90 days MOGU Inc is expected to generate 2.29 times more return on investment than Academy Sports. However, MOGU is 2.29 times more volatile than Academy Sports Outdoors. It trades about 0.02 of its potential returns per unit of risk. Academy Sports Outdoors is currently generating about 0.02 per unit of risk. If you would invest  272.00  in MOGU Inc on October 11, 2024 and sell it today you would lose (41.00) from holding MOGU Inc or give up 15.07% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.59%
Values	Daily Returns

MOGU Inc  vs.  Academy Sports Outdoors

MOGU Inc

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MOGU Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal technical and fundamental indicators, MOGU unveiled solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with MOGU and Academy Sports

The main advantage of trading using opposite MOGU and Academy Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MOGU 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 MOGU Inc 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.