Correlation Between FlyExclusive, and Academy Sports

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

By analyzing existing cross correlation between flyExclusive, and Academy Sports Outdoors, you can compare the effects of market volatilities on FlyExclusive, and Academy Sports 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 FlyExclusive, with a short position of Academy Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of FlyExclusive, and Academy Sports.

Diversification Opportunities for FlyExclusive, and Academy Sports

0.77

Correlation Coefficient

FlyExclusive,  Academy Sports

Poor diversification

The 3 months correlation between FlyExclusive, and Academy is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding flyExclusive, and Academy Sports Outdoors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Academy Sports Outdoors and FlyExclusive, 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 flyExclusive, are associated (or correlated) with Academy Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Academy Sports Outdoors has no effect on the direction of FlyExclusive, i.e., FlyExclusive, and Academy Sports go up and down completely randomly.

Pair Corralation between FlyExclusive, and Academy Sports

Given the investment horizon of 90 days FlyExclusive, is expected to generate 1.02 times less return on investment than Academy Sports. In addition to that, FlyExclusive, is 2.23 times more volatile than Academy Sports Outdoors. It trades about 0.18 of its total potential returns per unit of risk. Academy Sports Outdoors is currently generating about 0.4 per unit of volatility. If you would invest  4,934  in Academy Sports Outdoors on September 25, 2024 and sell it today you would earn a total of  886.00  from holding Academy Sports Outdoors or generate 17.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

flyExclusive,  vs.  Academy Sports Outdoors

flyExclusive,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days flyExclusive, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, FlyExclusive, is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Academy Sports Outdoors

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Academy Sports Outdoors has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Academy Sports is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with FlyExclusive, and Academy Sports

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

The idea behind flyExclusive, and Academy Sports Outdoors 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 the Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.