Correlation Between Dicks Sporting and Boqii Holding

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Can any of the company-specific risk be diversified away by investing in both Dicks Sporting and Boqii Holding 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 Boqii Holding 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 Boqii Holding, you can compare the effects of market volatilities on Dicks Sporting and Boqii Holding 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 Boqii Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dicks Sporting and Boqii Holding.

Diversification Opportunities for Dicks Sporting and Boqii Holding

0.5
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Dicks and Boqii is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Dicks Sporting Goods and Boqii Holding Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boqii Holding 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 Boqii Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boqii Holding has no effect on the direction of Dicks Sporting i.e., Dicks Sporting and Boqii Holding go up and down completely randomly.

Pair Corralation between Dicks Sporting and Boqii Holding

Considering the 90-day investment horizon Dicks Sporting Goods is expected to generate 0.41 times more return on investment than Boqii Holding. However, Dicks Sporting Goods is 2.43 times less risky than Boqii Holding. It trades about 0.08 of its potential returns per unit of risk. Boqii Holding is currently generating about -0.06 per unit of risk. If you would invest  4,275  in Dicks Sporting Goods on May 13, 2022 and sell it today you would earn a total of  6,346  from holding Dicks Sporting Goods or generate 148.44% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy94.57%
ValuesDaily Returns

Dicks Sporting Goods  vs.  Boqii Holding Ltd

 Performance (%) 
       Timeline  
Dicks Sporting Goods 
Dicks Performance
5 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Dicks Sporting Goods are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting forward-looking signals, Dicks Sporting reported solid returns over the last few months and may actually be approaching a breakup point.

Dicks Price Channel

Boqii Holding 
Boqii Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Boqii Holding are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Boqii Holding displayed solid returns over the last few months and may actually be approaching a breakup point.

Boqii Price Channel

Dicks Sporting and Boqii Holding Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Dicks Sporting and Boqii Holding

The main advantage of trading using opposite Dicks Sporting and Boqii Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dicks Sporting position performs unexpectedly, Boqii Holding 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 Boqii Holding will offset losses from the drop in Boqii Holding's long position.
The idea behind Dicks Sporting Goods and Boqii Holding 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.
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.

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