Correlation Between Hibbett Sports and Eldorado Resorts

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

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

Diversification Opportunities for Hibbett Sports and Eldorado Resorts

0.0

Correlation Coefficient

Hibbett Sports  Eldorado Resorts

Pay attention - limited upside

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

Pair Corralation between Hibbett Sports and Eldorado Resorts

If you would invest  8,139  in Hibbett Sports on March 4, 2024 and sell it today you would earn a total of  519.00  from holding Hibbett Sports or generate 6.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Hibbett Sports  vs.  Eldorado Resorts

Hibbett Sports

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hibbett Sports are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent fundamental drivers, Hibbett Sports may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Eldorado Resorts

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eldorado Resorts has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Eldorado Resorts is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Hibbett Sports and Eldorado Resorts

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

The idea behind Hibbett Sports and Eldorado Resorts 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.