Correlation Between DICKS Sporting and Fortive

Can any of the company-specific risk be diversified away by investing in both DICKS Sporting and Fortive 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 Fortive 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 Fortive, you can compare the effects of market volatilities on DICKS Sporting and Fortive 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 Fortive. Check out your portfolio center. Please also check ongoing floating volatility patterns of DICKS Sporting and Fortive.

Diversification Opportunities for DICKS Sporting and Fortive

-0.54

Correlation Coefficient

DICKS Sporting  Fortive

Excellent diversification

The 3 months correlation between DICKS and Fortive is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding DICKS Sporting Goods and Fortive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortive 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 Fortive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortive has no effect on the direction of DICKS Sporting i.e., DICKS Sporting and Fortive go up and down completely randomly.

Pair Corralation between DICKS Sporting and Fortive

Assuming the 90 days horizon DICKS Sporting Goods is expected to generate 0.8 times more return on investment than Fortive. However, DICKS Sporting Goods is 1.25 times less risky than Fortive. It trades about 0.08 of its potential returns per unit of risk. Fortive is currently generating about -0.12 per unit of risk. If you would invest  15,909  in DICKS Sporting Goods on April 24, 2025 and sell it today you would earn a total of  1,889  from holding DICKS Sporting Goods or generate 11.87% return on investment over 90 days.

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

DICKS Sporting Goods  vs.  Fortive

DICKS Sporting Goods

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in DICKS Sporting Goods are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, DICKS Sporting reported solid returns over the last few months and may actually be approaching a breakup point.

Fortive

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fortive has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with DICKS Sporting and Fortive

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

The idea behind DICKS Sporting Goods and Fortive 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.