Correlation Between Sinclair Broadcast and Dicks Sporting

Can any of the company-specific risk be diversified away by investing in both Sinclair Broadcast and Dicks Sporting 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 Sinclair Broadcast and Dicks Sporting into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sinclair Broadcast Group and Dicks Sporting Goods, you can compare the effects of market volatilities on Sinclair Broadcast and Dicks Sporting 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 Sinclair Broadcast with a short position of Dicks Sporting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinclair Broadcast and Dicks Sporting.

Diversification Opportunities for Sinclair Broadcast and Dicks Sporting

-0.81

Correlation Coefficient

Sinclair Broadcast  Dicks Sporting

Pay attention - limited upside

The 3 months correlation between Sinclair and Dicks is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Sinclair Broadcast Group and Dicks Sporting Goods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dicks Sporting Goods and Sinclair Broadcast 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 Sinclair Broadcast Group are associated (or correlated) with Dicks Sporting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dicks Sporting Goods has no effect on the direction of Sinclair Broadcast i.e., Sinclair Broadcast and Dicks Sporting go up and down completely randomly.

Pair Corralation between Sinclair Broadcast and Dicks Sporting

Given the investment horizon of 90 days Sinclair Broadcast Group is expected to generate 2.56 times more return on investment than Dicks Sporting. However, Sinclair Broadcast is 2.56 times more volatile than Dicks Sporting Goods. It trades about 0.01 of its potential returns per unit of risk. Dicks Sporting Goods is currently generating about -0.38 per unit of risk. If you would invest  1,214  in Sinclair Broadcast Group on January 20, 2024 and sell it today you would lose (4.00) from holding Sinclair Broadcast Group or give up 0.33% of portfolio value over 90 days.

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

Sinclair Broadcast Group  vs.  Dicks Sporting Goods

Sinclair Broadcast

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sinclair Broadcast Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in May 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Dicks Sporting Goods

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dicks Sporting Goods are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak forward-looking signals, Dicks Sporting unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sinclair Broadcast and Dicks Sporting

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

The idea behind Sinclair Broadcast Group and Dicks Sporting Goods 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.