Correlation Between Dicks Sporting and Card Factory
Can any of the company-specific risk be diversified away by investing in both Dicks Sporting and Card Factory 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 Card Factory 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 Card Factory plc, you can compare the effects of market volatilities on Dicks Sporting and Card Factory 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 Card Factory. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dicks Sporting and Card Factory.
Diversification Opportunities for Dicks Sporting and Card Factory
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dicks and Card is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Dicks Sporting Goods and Card Factory plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Card Factory plc 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 Card Factory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Card Factory plc has no effect on the direction of Dicks Sporting i.e., Dicks Sporting and Card Factory go up and down completely randomly.
Pair Corralation between Dicks Sporting and Card Factory
Considering the 90-day investment horizon Dicks Sporting is expected to generate 17.75 times less return on investment than Card Factory. But when comparing it to its historical volatility, Dicks Sporting Goods is 24.3 times less risky than Card Factory. It trades about 0.08 of its potential returns per unit of risk. Card Factory plc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 75.00 in Card Factory plc on February 16, 2024 and sell it today you would earn a total of 65.00 from holding Card Factory plc or generate 86.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 99.8% |
Values | Daily Returns |
Dicks Sporting Goods vs. Card Factory plc
Performance |
Timeline |
Dicks Sporting Goods |
Card Factory plc |
Dicks Sporting and Card Factory Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dicks Sporting and Card Factory
The main advantage of trading using opposite Dicks Sporting and Card Factory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dicks Sporting position performs unexpectedly, Card Factory 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 Card Factory will offset losses from the drop in Card Factory's long position.Dicks Sporting vs. RH | Dicks Sporting vs. AutoZone | Dicks Sporting vs. Best Buy Co | Dicks Sporting vs. Ulta Beauty |
Card Factory vs. Dixons Carphone plc | Card Factory vs. Ceconomy AG ADR | Card Factory vs. Tandy Leather Factory | Card Factory vs. Green River Gold |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
FinTech Suite Use AI to screen and filter profitable investment opportunities | |
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |