Correlation Between Digital Brands and Under Armour
Can any of the company-specific risk be diversified away by investing in both Digital Brands 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 Digital Brands and Under Armour into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digital Brands Group and Under Armour C, you can compare the effects of market volatilities on Digital Brands 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 Digital Brands with a short position of Under Armour. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital Brands and Under Armour.
Diversification Opportunities for Digital Brands and Under Armour
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Digital and Under is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Digital Brands Group and Under Armour C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Under Armour C and Digital Brands 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 Digital Brands Group 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 C has no effect on the direction of Digital Brands i.e., Digital Brands and Under Armour go up and down completely randomly.
Pair Corralation between Digital Brands and Under Armour
Given the investment horizon of 90 days Digital Brands Group is expected to under-perform the Under Armour. In addition to that, Digital Brands is 4.27 times more volatile than Under Armour C. It trades about -0.07 of its total potential returns per unit of risk. Under Armour C is currently generating about 0.01 per unit of volatility. If you would invest 845.00 in Under Armour C on September 19, 2024 and sell it today you would lose (62.00) from holding Under Armour C or give up 7.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digital Brands Group vs. Under Armour C
Performance |
| Timeline |
| Digital Brands Group |
| Under Armour C |
Digital Brands and Under Armour Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital Brands and Under Armour
The main advantage of trading using opposite Digital Brands and Under Armour positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital Brands 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.| Digital Brands vs. Capri Holdings | Digital Brands vs. Movado Group | Digital Brands vs. Tapestry | Digital Brands vs. Brilliant Earth Group |
| Under Armour vs. Digital Brands Group | Under Armour vs. Data Storage | Under Armour vs. Auddia Inc | Under Armour vs. DatChat Series A |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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