Correlation Between Academy Sports and PIMCO Preferred

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

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

Diversification Opportunities for Academy Sports and PIMCO Preferred

0.85

Correlation Coefficient

Academy Sports  PIMCO Preferred

Very poor diversification

The 3 months correlation between Academy and PIMCO is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Academy Sports Outdoors and PIMCO Preferred And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO Preferred And and Academy 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 Academy Sports Outdoors are associated (or correlated) with PIMCO Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO Preferred And has no effect on the direction of Academy Sports i.e., Academy Sports and PIMCO Preferred go up and down completely randomly.

Pair Corralation between Academy Sports and PIMCO Preferred

Considering the 90-day investment horizon Academy Sports Outdoors is expected to generate 21.54 times more return on investment than PIMCO Preferred. However, Academy Sports is 21.54 times more volatile than PIMCO Preferred And. It trades about 0.15 of its potential returns per unit of risk. PIMCO Preferred And is currently generating about 0.42 per unit of risk. If you would invest  3,757  in Academy Sports Outdoors on May 6, 2025 and sell it today you would earn a total of  1,170  from holding Academy Sports Outdoors or generate 31.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Academy Sports Outdoors  vs.  PIMCO Preferred And

Academy Sports Outdoors

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Academy Sports Outdoors are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Academy Sports displayed solid returns over the last few months and may actually be approaching a breakup point.

PIMCO Preferred And

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in PIMCO Preferred And are ranked lower than 32 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, PIMCO Preferred is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Academy Sports and PIMCO Preferred

The main advantage of trading using opposite Academy Sports and PIMCO Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Academy Sports position performs unexpectedly, PIMCO Preferred 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 PIMCO Preferred will offset losses from the drop in PIMCO Preferred's long position.

The idea behind Academy Sports Outdoors and PIMCO Preferred And 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.

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.