Correlation Between Dicks Sporting and International Business

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Dicks Sporting and International Business 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 International Business 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 International Business Machines, you can compare the effects of market volatilities on Dicks Sporting and International Business 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 International Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dicks Sporting and International Business.

Diversification Opportunities for Dicks Sporting and International Business

-0.55
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Dicks and International is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Dicks Sporting Goods and International Business Machine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Business 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 International Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Business has no effect on the direction of Dicks Sporting i.e., Dicks Sporting and International Business go up and down completely randomly.

Pair Corralation between Dicks Sporting and International Business

Considering the 90-day investment horizon Dicks Sporting Goods is expected to generate 2.14 times more return on investment than International Business. However, Dicks Sporting is 2.14 times more volatile than International Business Machines. It trades about 0.2 of its potential returns per unit of risk. International Business Machines is currently generating about -0.14 per unit of risk. If you would invest  7,895  in Dicks Sporting Goods on July 6, 2022 and sell it today you would earn a total of  3,087  from holding Dicks Sporting Goods or generate 39.1% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Dicks Sporting Goods  vs.  International Business Machine

 Performance (%) 
       Timeline  
Dicks Sporting Goods 
Dicks Performance
14 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Dicks Sporting Goods are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak forward-looking signals, Dicks Sporting reported solid returns over the last few months and may actually be approaching a breakup point.

Dicks Price Channel

International Business 
International Performance
0 of 100
Over the last 90 days International Business Machines has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's fundamental drivers remain steady and the new chaos on Wall Street may also be a sign of medium-term gains for the company stakeholders.

International Price Channel

Dicks Sporting and International Business Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Dicks Sporting and International Business

The main advantage of trading using opposite Dicks Sporting and International Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dicks Sporting position performs unexpectedly, International Business 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 International Business will offset losses from the drop in International Business' long position.
Dicks Sporting vs. Best Buy Company
The idea behind Dicks Sporting Goods and International Business Machines 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.
International Business vs. Axcelis Tech
International Business vs. Asml Hld NV
International Business vs. Martin Marietta Materials
International Business vs. Vulcan Materials
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.

Other Complementary Tools

Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Go
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Go
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Go
CEO Directory
Screen CEOs from public companies around the world
Go
Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities
Go
Portfolio Optimization
Compute new portfolio that will generate highest expected return given your specified tolerance for risk
Go
Watchlist Optimization
Optimize watchlists to build efficient portfolio or rebalance existing positions based on mean-variance optimization algorithm
Go
Equity Valuation
Check real value of public entities based on technical and fundamental data
Go
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Go
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Go