Correlation Between Academy Sports and Pacer WealthShield

Can any of the company-specific risk be diversified away by investing in both Academy Sports and Pacer WealthShield 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 Pacer WealthShield 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 Pacer WealthShield, you can compare the effects of market volatilities on Academy Sports and Pacer WealthShield 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 Pacer WealthShield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Academy Sports and Pacer WealthShield.

Diversification Opportunities for Academy Sports and Pacer WealthShield

0.67

Correlation Coefficient

Academy Sports  Pacer WealthShield

Poor diversification

The 3 months correlation between Academy and Pacer is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Academy Sports Outdoors and Pacer WealthShield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer WealthShield 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 Pacer WealthShield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer WealthShield has no effect on the direction of Academy Sports i.e., Academy Sports and Pacer WealthShield go up and down completely randomly.

Pair Corralation between Academy Sports and Pacer WealthShield

Considering the 90-day investment horizon Academy Sports Outdoors is expected to generate 3.79 times more return on investment than Pacer WealthShield. However, Academy Sports is 3.79 times more volatile than Pacer WealthShield. It trades about 0.07 of its potential returns per unit of risk. Pacer WealthShield is currently generating about 0.19 per unit of risk. If you would invest  4,780  in Academy Sports Outdoors on May 6, 2025 and sell it today you would earn a total of  147.00  from holding Academy Sports Outdoors or generate 3.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Academy Sports Outdoors  vs.  Pacer WealthShield

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.

Pacer WealthShield

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Pacer WealthShield are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Pacer WealthShield is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Academy Sports and Pacer WealthShield

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

The idea behind Academy Sports Outdoors and Pacer WealthShield 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.