Correlation Between 50249AAD5 and Academy Sports

Can any of the company-specific risk be diversified away by investing in both 50249AAD5 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 50249AAD5 and Academy Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between LYB INTERNATIONAL FINANCE and Academy Sports Outdoors, you can compare the effects of market volatilities on 50249AAD5 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 50249AAD5 with a short position of Academy Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of 50249AAD5 and Academy Sports.

Diversification Opportunities for 50249AAD5 and Academy Sports

-0.44

Correlation Coefficient

50249AAD5  Academy Sports

Very good diversification

The 3 months correlation between 50249AAD5 and Academy is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding LYB INTERNATIONAL FINANCE 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 50249AAD5 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 LYB INTERNATIONAL FINANCE 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 50249AAD5 i.e., 50249AAD5 and Academy Sports go up and down completely randomly.

Pair Corralation between 50249AAD5 and Academy Sports

Assuming the 90 days trading horizon LYB INTERNATIONAL FINANCE is expected to generate 1.12 times more return on investment than Academy Sports. However, 50249AAD5 is 1.12 times more volatile than Academy Sports Outdoors. It trades about 0.21 of its potential returns per unit of risk. Academy Sports Outdoors is currently generating about -0.16 per unit of risk. If you would invest  7,476  in LYB INTERNATIONAL FINANCE on October 26, 2024 and sell it today you would earn a total of  795.00  from holding LYB INTERNATIONAL FINANCE or generate 10.63% return on investment over 90 days.

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

LYB INTERNATIONAL FINANCE  vs.  Academy Sports Outdoors

LYB INTERNATIONAL FINANCE

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in LYB INTERNATIONAL FINANCE are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, 50249AAD5 may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Academy Sports Outdoors

Risk-Adjusted Performance

5 of 100

Insignificant

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 50249AAD5 and Academy Sports

The main advantage of trading using opposite 50249AAD5 and Academy Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 50249AAD5 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 LYB INTERNATIONAL FINANCE 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.