Correlation Between Amer Sports, and Culp
Can any of the company-specific risk be diversified away by investing in both Amer Sports, and Culp 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 Amer Sports, and Culp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amer Sports, and Culp Inc, you can compare the effects of market volatilities on Amer Sports, and Culp 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 Amer Sports, with a short position of Culp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amer Sports, and Culp.
Diversification Opportunities for Amer Sports, and Culp
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Amer and Culp is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Amer Sports, and Culp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Culp Inc and Amer 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 Amer Sports, are associated (or correlated) with Culp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Culp Inc has no effect on the direction of Amer Sports, i.e., Amer Sports, and Culp go up and down completely randomly.
Pair Corralation between Amer Sports, and Culp
Allowing for the 90-day total investment horizon Amer Sports, is expected to generate 1.62 times more return on investment than Culp. However, Amer Sports, is 1.62 times more volatile than Culp Inc. It trades about 0.31 of its potential returns per unit of risk. Culp Inc is currently generating about -0.02 per unit of risk. If you would invest 2,058 in Amer Sports, on September 12, 2024 and sell it today you would earn a total of 506.00 from holding Amer Sports, or generate 24.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Amer Sports, vs. Culp Inc
Performance |
| Timeline |
| Amer Sports, |
| Culp Inc |
Amer Sports, and Culp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amer Sports, and Culp
The main advantage of trading using opposite Amer Sports, and Culp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amer Sports, position performs unexpectedly, Culp 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 Culp will offset losses from the drop in Culp's long position.| Amer Sports, vs. Jeld Wen Holding | Amer Sports, vs. EMCOR Group | Amer Sports, vs. Eastern Co | Amer Sports, vs. Everus Construction Group |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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