Correlation Between Dicks Sporting and Celestica

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

Diversification Opportunities for Dicks Sporting and Celestica

-0.43
  Correlation Coefficient

Very good diversification

The 3 months correlation between Dicks and Celestica is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Dicks Sporting Goods and Celestica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celestica 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 Celestica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celestica has no effect on the direction of Dicks Sporting i.e., Dicks Sporting and Celestica go up and down completely randomly.

Pair Corralation between Dicks Sporting and Celestica

Considering the 90-day investment horizon Dicks Sporting Goods is expected to under-perform the Celestica. But the stock apears to be less risky and, when comparing its historical volatility, Dicks Sporting Goods is 1.86 times less risky than Celestica. The stock trades about 0.0 of its potential returns per unit of risk. The Celestica is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  25,303  in Celestica on September 10, 2025 and sell it today you would earn a total of  8,773  from holding Celestica or generate 34.67% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Dicks Sporting Goods  vs.  Celestica

 Performance 
       Timeline  
Dicks Sporting Goods 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days Dicks Sporting Goods has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward-looking signals, Dicks Sporting is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.
Celestica 

Risk-Adjusted Performance

Fair

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Celestica are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating essential indicators, Celestica unveiled solid returns over the last few months and may actually be approaching a breakup point.

Dicks Sporting and Celestica Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Dicks Sporting and Celestica

The main advantage of trading using opposite Dicks Sporting and Celestica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dicks Sporting position performs unexpectedly, Celestica 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 Celestica will offset losses from the drop in Celestica's long position.
The idea behind Dicks Sporting Goods and Celestica 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.

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