Correlation Between Dicks Sporting and Foot Locker
Can any of the company-specific risk be diversified away by investing in both Dicks Sporting and Foot Locker 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 Foot Locker 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 Foot Locker, you can compare the effects of market volatilities on Dicks Sporting and Foot Locker 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 Foot Locker. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dicks Sporting and Foot Locker.
Diversification Opportunities for Dicks Sporting and Foot Locker
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dicks and Foot is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Dicks Sporting Goods and Foot Locker in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foot Locker 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 Foot Locker. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foot Locker has no effect on the direction of Dicks Sporting i.e., Dicks Sporting and Foot Locker go up and down completely randomly.
Pair Corralation between Dicks Sporting and Foot Locker
Considering the 90-day investment horizon Dicks Sporting Goods is expected to generate 0.52 times more return on investment than Foot Locker. However, Dicks Sporting Goods is 1.91 times less risky than Foot Locker. It trades about 0.23 of its potential returns per unit of risk. Foot Locker is currently generating about 0.09 per unit of risk. If you would invest 11,390 in Dicks Sporting Goods on December 29, 2023 and sell it today you would earn a total of 11,096 from holding Dicks Sporting Goods or generate 97.42% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Dicks Sporting Goods vs. Foot Locker
Performance |
Timeline |
Dicks Sporting Goods |
Foot Locker |
Dicks Sporting and Foot Locker Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dicks Sporting and Foot Locker
The main advantage of trading using opposite Dicks Sporting and Foot Locker positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dicks Sporting position performs unexpectedly, Foot Locker 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 Foot Locker will offset losses from the drop in Foot Locker's long position.Dicks Sporting vs. Macys Inc | Dicks Sporting vs. Wayfair | Dicks Sporting vs. 1StdibsCom | Dicks Sporting vs. AutoNation |
Foot Locker vs. Macys Inc | Foot Locker vs. Wayfair | Foot Locker vs. 1StdibsCom | Foot Locker vs. AutoNation |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
Content Syndication Quickly integrate customizable finance content to your own investment portal | |
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
Global Correlations Find global opportunities by holding instruments from different markets | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
Stocks Directory Find actively traded stocks across global markets | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |