Correlation Between NYSE Composite and Under Armour
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Under Armour into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Under Armour C, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Under Armour. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Under Armour.
Diversification Opportunities for NYSE Composite and Under Armour
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NYSE and Under is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Under Armour go up and down completely randomly.
Pair Corralation between NYSE Composite and Under Armour
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.26 times more return on investment than Under Armour. However, NYSE Composite is 3.92 times less risky than Under Armour. It trades about 0.08 of its potential returns per unit of risk. Under Armour C is currently generating about 0.02 per unit of risk. If you would invest 1,529,105 in NYSE Composite on August 30, 2024 and sell it today you would earn a total of 491,877 from holding NYSE Composite or generate 32.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Under Armour C
Performance |
| Timeline |
NYSE Composite and Under Armour Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Under Armour C
Pair trading matchups for Under Armour
Pair Trading with NYSE Composite and Under Armour
The main advantage of trading using opposite NYSE Composite and Under Armour positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Delek Drilling | NYSE Composite vs. Helmerich and Payne | NYSE Composite vs. Waste Management | NYSE Composite vs. US Global Investors |
| 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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