Correlation Between 111 and Sportsmans

Can any of the company-specific risk be diversified away by investing in both 111 and Sportsmans 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 111 and Sportsmans into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 111 Inc and Sportsmans, you can compare the effects of market volatilities on 111 and Sportsmans 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 111 with a short position of Sportsmans. Check out your portfolio center. Please also check ongoing floating volatility patterns of 111 and Sportsmans.

Diversification Opportunities for 111 and Sportsmans

0.24

Correlation Coefficient

111  Sportsmans

Modest diversification

The 3 months correlation between 111 and Sportsmans is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding 111 Inc and Sportsmans in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sportsmans and 111 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 111 Inc are associated (or correlated) with Sportsmans. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sportsmans has no effect on the direction of 111 i.e., 111 and Sportsmans go up and down completely randomly.

Pair Corralation between 111 and Sportsmans

Allowing for the 90-day total investment horizon 111 Inc is expected to under-perform the Sportsmans. In addition to that, 111 is 1.21 times more volatile than Sportsmans. It trades about -0.03 of its total potential returns per unit of risk. Sportsmans is currently generating about -0.02 per unit of volatility. If you would invest  466.00  in Sportsmans on September 17, 2024 and sell it today you would lose (207.00) from holding Sportsmans or give up 44.42% of portfolio value over 90 days.

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

111 Inc  vs.  Sportsmans

111 Inc

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in 111 Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak forward indicators, 111 demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Sportsmans

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sportsmans has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with 111 and Sportsmans

The main advantage of trading using opposite 111 and Sportsmans positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 111 position performs unexpectedly, Sportsmans 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 Sportsmans will offset losses from the drop in Sportsmans' long position.

The idea behind 111 Inc and Sportsmans 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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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 Global Correlations module to find global opportunities by holding instruments from different markets.