Correlation Between Gap, and Under Armour
Can any of the company-specific risk be diversified away by investing in both Gap, 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 Gap, and Under Armour into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Gap, and Under Armour C, you can compare the effects of market volatilities on Gap, 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 Gap, with a short position of Under Armour. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gap, and Under Armour.
Diversification Opportunities for Gap, and Under Armour
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gap, and Under is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding The Gap, 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 Gap, 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 The Gap, 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 Gap, i.e., Gap, and Under Armour go up and down completely randomly.
Pair Corralation between Gap, and Under Armour
Considering the 90-day investment horizon The Gap, is expected to generate 1.23 times more return on investment than Under Armour. However, Gap, is 1.23 times more volatile than Under Armour C. It trades about 0.06 of its potential returns per unit of risk. Under Armour C is currently generating about 0.01 per unit of risk. If you would invest 1,118 in The Gap, on August 31, 2024 and sell it today you would earn a total of 1,307 from holding The Gap, or generate 116.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
The Gap, vs. Under Armour C
Performance |
| Timeline |
| Gap, |
| Under Armour C |
Gap, and Under Armour Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gap, and Under Armour
The main advantage of trading using opposite Gap, and Under Armour positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gap, 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.| Gap, vs. SEI Investments | Gap, vs. Corporacion America Airports | Gap, vs. Nasdaq Inc | Gap, vs. Sabra Healthcare REIT |
| Under Armour vs. Levi Strauss Co | Under Armour vs. Columbia Sportswear | Under Armour vs. Hanesbrands | Under Armour vs. PVH 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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