Correlation Between Dicks Sporting and Specialty Liquid

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

Diversification Opportunities for Dicks Sporting and Specialty Liquid

0.0

Correlation Coefficient

Dicks Sporting  Specialty Liquid

Pay attention - limited upside

The 3 months correlation between Dicks and Specialty is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Dicks Sporting Goods and Specialty Liquid Transportatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Specialty Liquid Tra 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 Specialty Liquid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Specialty Liquid Tra has no effect on the direction of Dicks Sporting i.e., Dicks Sporting and Specialty Liquid go up and down completely randomly.

Pair Corralation between Dicks Sporting and Specialty Liquid

If you would invest  0.25  in Specialty Liquid Transportation on January 24, 2024 and sell it today you would earn a total of  0.00  from holding Specialty Liquid Transportation or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	5.0%
Values	Daily Returns

Dicks Sporting Goods  vs.  Specialty Liquid Transportatio

Dicks Sporting Goods

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dicks Sporting Goods are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating forward-looking signals, Dicks Sporting unveiled solid returns over the last few months and may actually be approaching a breakup point.

Specialty Liquid Tra

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Specialty Liquid Transportation has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Specialty Liquid is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Dicks Sporting and Specialty Liquid

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

The idea behind Dicks Sporting Goods and Specialty Liquid Transportation 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.