Correlation Between Hibbett Sports and Beyond

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

By analyzing existing cross correlation between Hibbett Sports and Beyond Inc, you can compare the effects of market volatilities on Hibbett Sports and Beyond 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 Hibbett Sports with a short position of Beyond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hibbett Sports and Beyond.

Diversification Opportunities for Hibbett Sports and Beyond

-0.76

Correlation Coefficient

Hibbett Sports  Beyond

Pay attention - limited upside

The 3 months correlation between Hibbett and Beyond is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Hibbett Sports and Beyond Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beyond Inc and Hibbett 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 Hibbett Sports are associated (or correlated) with Beyond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beyond Inc has no effect on the direction of Hibbett Sports i.e., Hibbett Sports and Beyond go up and down completely randomly.

Pair Corralation between Hibbett Sports and Beyond

Given the investment horizon of 90 days Hibbett Sports is expected to generate 0.62 times more return on investment than Beyond. However, Hibbett Sports is 1.61 times less risky than Beyond. It trades about 0.07 of its potential returns per unit of risk. Beyond Inc is currently generating about -0.24 per unit of risk. If you would invest  7,706  in Hibbett Sports on March 7, 2024 and sell it today you would earn a total of  921.00  from holding Hibbett Sports or generate 11.95% return on investment over 90 days.

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

Hibbett Sports  vs.  Beyond Inc

Hibbett Sports

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hibbett Sports are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal fundamental drivers, Hibbett Sports sustained solid returns over the last few months and may actually be approaching a breakup point.

Beyond Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Beyond Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in July 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Hibbett Sports and Beyond

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

The idea behind Hibbett Sports and Beyond Inc 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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.