Correlation Between Genuine Parts and Dicks Sporting

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Can any of the company-specific risk be diversified away by investing in both Genuine Parts and Dicks Sporting 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 Genuine Parts and Dicks Sporting into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genuine Parts and Dicks Sporting Goods, you can compare the effects of market volatilities on Genuine Parts and Dicks Sporting 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 Genuine Parts with a short position of Dicks Sporting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genuine Parts and Dicks Sporting.

Diversification Opportunities for Genuine Parts and Dicks Sporting

-0.19
  Correlation Coefficient

Good diversification

The 6 months correlation between Genuine and Dicks is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Genuine Parts and Dicks Sporting Goods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dicks Sporting Goods and Genuine Parts 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 Genuine Parts are associated (or correlated) with Dicks Sporting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dicks Sporting Goods has no effect on the direction of Genuine Parts i.e., Genuine Parts and Dicks Sporting go up and down completely randomly.

Pair Corralation between Genuine Parts and Dicks Sporting

Considering the 90-day investment horizon Genuine Parts is expected to generate 0.44 times more return on investment than Dicks Sporting. However, Genuine Parts is 2.28 times less risky than Dicks Sporting. It trades about 0.08 of its potential returns per unit of risk. Dicks Sporting Goods is currently generating about -0.07 per unit of risk. If you would invest  12,680  in Genuine Parts on March 27, 2022 and sell it today you would earn a total of  995.00  from holding Genuine Parts or generate 7.85% return on investment over 90 days.
Time Period6 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Genuine Parts  vs.  Dicks Sporting Goods

 Performance (%) 
      Timeline 
Genuine Parts 
Genuine Performance
0 of 100
Over the last 90 days Genuine Parts has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Genuine Parts is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0269
Payout Ratio
0.47
Last Split Factor
3:2
Forward Annual Dividend Rate
3.58
Dividend Date
2022-07-01
Ex Dividend Date
2022-06-02
Last Split Date
1997-04-15

Genuine Price Channel

Dicks Sporting Goods 
Dicks Performance
0 of 100
Over the last 90 days Dicks Sporting Goods has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's forward-looking signals remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0258
Payout Ratio
0.41
Last Split Factor
2:1
Forward Annual Dividend Rate
1.95
Dividend Date
2022-06-24
Ex Dividend Date
2022-06-09
Last Split Date
2007-10-22

Dicks Price Channel

Genuine Parts and Dicks Sporting Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Genuine Parts and Dicks Sporting

The main advantage of trading using opposite Genuine Parts and Dicks Sporting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genuine Parts position performs unexpectedly, Dicks Sporting 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 Dicks Sporting will offset losses from the drop in Dicks Sporting's long position.
The idea behind Genuine Parts and Dicks Sporting Goods 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.

Dicks Sporting Goods

Pair trading matchups for Dicks Sporting

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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.

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