Correlation Between Hibbett Sports and Lands End

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

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

Diversification Opportunities for Hibbett Sports and Lands End

0.37

Correlation Coefficient

Hibbett Sports  Lands End

Weak diversification

The 3 months correlation between Hibbett and Lands is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Hibbett Sports and Lands End in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lands End and Hibbett Sports 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 Hibbett Sports are associated (or correlated) with Lands End. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lands End has no effect on the direction of Hibbett Sports i.e., Hibbett Sports and Lands End go up and down completely randomly.

Pair Corralation between Hibbett Sports and Lands End

Given the investment horizon of 90 days Hibbett Sports is expected to generate 1.29 times less return on investment than Lands End. In addition to that, Hibbett Sports is 1.05 times more volatile than Lands End. It trades about 0.17 of its total potential returns per unit of risk. Lands End is currently generating about 0.23 per unit of volatility. If you would invest  1,131  in Lands End on February 1, 2024 and sell it today you would earn a total of  237.00  from holding Lands End or generate 20.95% return on investment over 90 days.

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

Hibbett Sports  vs.  Lands End

Hibbett Sports

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hibbett Sports are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental drivers, Hibbett Sports sustained solid returns over the last few months and may actually be approaching a breakup point.

Lands End

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lands End are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting technical and fundamental indicators, Lands End exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hibbett Sports and Lands End

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

The idea behind Hibbett Sports and Lands End 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.