Correlation Between ANGANG STEEL and Urban Outfitters
Can any of the company-specific risk be diversified away by investing in both ANGANG STEEL and Urban Outfitters 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 ANGANG STEEL and Urban Outfitters into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANGANG STEEL H and Urban Outfitters, you can compare the effects of market volatilities on ANGANG STEEL and Urban Outfitters 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 ANGANG STEEL with a short position of Urban Outfitters. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANGANG STEEL and Urban Outfitters.
Diversification Opportunities for ANGANG STEEL and Urban Outfitters
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between ANGANG and Urban is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding ANGANG STEEL H and Urban Outfitters in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Urban Outfitters and ANGANG STEEL 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 ANGANG STEEL H are associated (or correlated) with Urban Outfitters. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Urban Outfitters has no effect on the direction of ANGANG STEEL i.e., ANGANG STEEL and Urban Outfitters go up and down completely randomly.
Pair Corralation between ANGANG STEEL and Urban Outfitters
Assuming the 90 days trading horizon ANGANG STEEL H is expected to under-perform the Urban Outfitters. In addition to that, ANGANG STEEL is 1.47 times more volatile than Urban Outfitters. It trades about -0.01 of its total potential returns per unit of risk. Urban Outfitters is currently generating about 0.07 per unit of volatility. If you would invest 2,594 in Urban Outfitters on November 7, 2024 and sell it today you would earn a total of 2,606 from holding Urban Outfitters or generate 100.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ANGANG STEEL H vs. Urban Outfitters
Performance |
| Timeline |
| ANGANG STEEL H |
| Urban Outfitters |
ANGANG STEEL and Urban Outfitters Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANGANG STEEL and Urban Outfitters
The main advantage of trading using opposite ANGANG STEEL and Urban Outfitters positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANGANG STEEL position performs unexpectedly, Urban Outfitters 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 Urban Outfitters will offset losses from the drop in Urban Outfitters' long position.| ANGANG STEEL vs. Apple Inc | ANGANG STEEL vs. Apple Inc | ANGANG STEEL vs. Apple Inc | ANGANG STEEL vs. Apple Inc |
| Urban Outfitters vs. Industria de Diseno | Urban Outfitters vs. The TJX Companies | Urban Outfitters vs. Fast Retailing Co | Urban Outfitters vs. Lululemon Athletica |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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