Correlation Between Dicks Sporting and Genesco
Can any of the company-specific risk be diversified away by investing in both Dicks Sporting and Genesco 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 Dicks Sporting and Genesco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dicks Sporting Goods and Genesco, you can compare the effects of market volatilities on Dicks Sporting and Genesco 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 Dicks Sporting with a short position of Genesco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dicks Sporting and Genesco.
Diversification Opportunities for Dicks Sporting and Genesco
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dicks and Genesco is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Dicks Sporting Goods and Genesco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genesco and Dicks Sporting 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 Dicks Sporting Goods are associated (or correlated) with Genesco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genesco has no effect on the direction of Dicks Sporting i.e., Dicks Sporting and Genesco go up and down completely randomly.
Pair Corralation between Dicks Sporting and Genesco
Considering the 90-day investment horizon Dicks Sporting Goods is expected to generate 0.72 times more return on investment than Genesco. However, Dicks Sporting Goods is 1.4 times less risky than Genesco. It trades about 0.08 of its potential returns per unit of risk. Genesco is currently generating about -0.02 per unit of risk. If you would invest 8,599 in Dicks Sporting Goods on February 3, 2024 and sell it today you would earn a total of 11,674 from holding Dicks Sporting Goods or generate 135.76% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Dicks Sporting Goods vs. Genesco
Performance |
Timeline |
Dicks Sporting Goods |
Genesco |
Dicks Sporting and Genesco Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dicks Sporting and Genesco
The main advantage of trading using opposite Dicks Sporting and Genesco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dicks Sporting position performs unexpectedly, Genesco 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 Genesco will offset losses from the drop in Genesco's long position.Dicks Sporting vs. Evgo Inc | Dicks Sporting vs. RH | Dicks Sporting vs. ChargePoint Holdings | Dicks Sporting vs. AutoZone |
Check out your portfolio center.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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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