Correlation Between Chewy and Under
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By analyzing existing cross correlation between Chewy Inc and Under Armour 325, you can compare the effects of market volatilities on Chewy and Under 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 Chewy with a short position of Under. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chewy and Under.
Diversification Opportunities for Chewy and Under
Excellent diversification
The 3 months correlation between Chewy and Under is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Chewy Inc and Under Armour 325 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Under Armour 325 and Chewy 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 Chewy Inc are associated (or correlated) with Under. 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 325 has no effect on the direction of Chewy i.e., Chewy and Under go up and down completely randomly.
Pair Corralation between Chewy and Under
Given the investment horizon of 90 days Chewy Inc is expected to generate 5.38 times more return on investment than Under. However, Chewy is 5.38 times more volatile than Under Armour 325. It trades about 0.0 of its potential returns per unit of risk. Under Armour 325 is currently generating about 0.01 per unit of risk. If you would invest 4,285 in Chewy Inc on September 4, 2024 and sell it today you would lose (922.00) from holding Chewy Inc or give up 21.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Chewy Inc vs. Under Armour 325
Performance |
| Timeline |
| Chewy Inc |
| Under Armour 325 |
Chewy and Under Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chewy and Under
The main advantage of trading using opposite Chewy and Under positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chewy position performs unexpectedly, Under 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 will offset losses from the drop in Under's long position.The idea behind Chewy Inc and Under Armour 325 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.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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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