Correlation Between Amer Sports, and Under Armour
Can any of the company-specific risk be diversified away by investing in both Amer Sports, and Under Armour 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 Under Armour into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amer Sports, and Under Armour A, you can compare the effects of market volatilities on Amer Sports, and Under Armour 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 Under Armour. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amer Sports, and Under Armour.
Diversification Opportunities for Amer Sports, and Under Armour
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amer and Under is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Amer Sports, and Under Armour A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Under Armour A 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 Under Armour. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Under Armour A has no effect on the direction of Amer Sports, i.e., Amer Sports, and Under Armour go up and down completely randomly.
Pair Corralation between Amer Sports, and Under Armour
Allowing for the 90-day total investment horizon Amer Sports, is expected to generate 0.96 times more return on investment than Under Armour. However, Amer Sports, is 1.04 times less risky than Under Armour. It trades about 0.1 of its potential returns per unit of risk. Under Armour A is currently generating about 0.03 per unit of risk. If you would invest 1,340 in Amer Sports, on August 26, 2024 and sell it today you would earn a total of 1,090 from holding Amer Sports, or generate 81.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 83.13% |
| Values | Daily Returns |
Amer Sports, vs. Under Armour A
Performance |
| Timeline |
| Amer Sports, |
| Under Armour A |
Amer Sports, and Under Armour Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amer Sports, and Under Armour
The main advantage of trading using opposite Amer Sports, and Under Armour positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amer Sports, position performs unexpectedly, Under Armour 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 Under Armour will offset losses from the drop in Under Armour's long position.| Amer Sports, vs. VF Corporation | Amer Sports, vs. Levi Strauss Co | Amer Sports, vs. Under Armour A | Amer Sports, vs. Oxford Industries |
| Under Armour vs. Levi Strauss Co | Under Armour vs. Hanesbrands | Under Armour vs. VF Corporation | Under Armour vs. Ralph Lauren Corp |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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