Correlation Between Polished and Sportsmans

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

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

Diversification Opportunities for Polished and Sportsmans

0.16

Correlation Coefficient

Polished  Sportsmans

Average diversification

The 3 months correlation between Polished and Sportsmans is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Polished and Sportsmans in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sportsmans and Polished 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 Polished 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 Polished i.e., Polished and Sportsmans go up and down completely randomly.

Pair Corralation between Polished 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	Insignificant
Accuracy	0.79%
Values	Daily Returns

Polished  vs.  Sportsmans

Polished

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Polished has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Polished is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional 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 Polished and Sportsmans

The main advantage of trading using opposite Polished and Sportsmans positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polished 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 Polished 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .