Correlation Between SIGNA Sports and Sportsmans

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

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

Diversification Opportunities for SIGNA Sports and Sportsmans

0.48

Correlation Coefficient

SIGNA Sports  Sportsmans

Very weak diversification

The 3 months correlation between SIGNA and Sportsmans is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding SIGNA Sports United and Sportsmans in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sportsmans and SIGNA Sports 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 SIGNA Sports United 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 SIGNA Sports i.e., SIGNA Sports and Sportsmans go up and down completely randomly.

Pair Corralation between SIGNA Sports and Sportsmans

If you would invest  271.00  in Sportsmans on September 29, 2024 and sell it today you would lose (6.00) from holding Sportsmans or give up 2.21% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.59%
Values	Daily Returns

SIGNA Sports United  vs.  Sportsmans

SIGNA Sports United

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SIGNA Sports United has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, SIGNA Sports is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private 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 SIGNA Sports and Sportsmans

The main advantage of trading using opposite SIGNA Sports and Sportsmans positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIGNA Sports 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 SIGNA Sports United 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.