Correlation Between Intel and Dicks Sporting

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

Diversification Opportunities for Intel and Dicks Sporting

0.15
  Correlation Coefficient

Average diversification

The 3 months correlation between Intel and Dicks is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Intel 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 Intel 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 Intel 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 Intel i.e., Intel and Dicks Sporting go up and down completely randomly.

Pair Corralation between Intel and Dicks Sporting

Given the investment horizon of 90 days Intel is expected to under-perform the Dicks Sporting. But the stock apears to be less risky and, when comparing its historical volatility, Intel is 1.36 times less risky than Dicks Sporting. The stock trades about -0.03 of its potential returns per unit of risk. The Dicks Sporting Goods is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  4,851  in Dicks Sporting Goods on September 7, 2022 and sell it today you would earn a total of  6,672  from holding Dicks Sporting Goods or generate 137.54% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Intel  vs.  Dicks Sporting Goods

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

Intel Price Channel

Dicks Sporting Goods 
Dicks Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Dicks Sporting Goods are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile forward-looking signals, Dicks Sporting may actually be approaching a critical reversion point that can send shares even higher in January 2023.

Dicks Price Channel

Intel and Dicks Sporting Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Intel and Dicks Sporting

The main advantage of trading using opposite Intel and Dicks Sporting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel 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.
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The idea behind Intel 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.
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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.

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