Correlation Between Hibbett Sports and Express

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

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

Diversification Opportunities for Hibbett Sports and Express

-0.49

Correlation Coefficient

Hibbett Sports  Express

Very good diversification

The 3 months correlation between Hibbett and Express is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Hibbett Sports and Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Express 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 Express. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Express has no effect on the direction of Hibbett Sports i.e., Hibbett Sports and Express go up and down completely randomly.

Pair Corralation between Hibbett Sports and Express

If you would invest  7,030  in Hibbett Sports on February 13, 2024 and sell it today you would earn a total of  1,657  from holding Hibbett Sports or generate 23.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	4.76%
Values	Daily Returns

Hibbett Sports  vs.  Express

Hibbett Sports

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hibbett Sports are ranked lower than 8 (%) 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.

Express

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Express has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in June 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Hibbett Sports and Express

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

The idea behind Hibbett Sports and Express 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.