Correlation Between SP Global and Urban Outfitters
Can any of the company-specific risk be diversified away by investing in both SP Global 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 SP Global and Urban Outfitters into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SP Global and Urban Outfitters, you can compare the effects of market volatilities on SP Global 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 SP Global with a short position of Urban Outfitters. Check out your portfolio center. Please also check ongoing floating volatility patterns of SP Global and Urban Outfitters.
Diversification Opportunities for SP Global and Urban Outfitters
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between SPGI and Urban is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding SP Global and Urban Outfitters in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Urban Outfitters and SP Global 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 SP Global 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 SP Global i.e., SP Global and Urban Outfitters go up and down completely randomly.
Pair Corralation between SP Global and Urban Outfitters
Given the investment horizon of 90 days SP Global is expected to generate 2.13 times less return on investment than Urban Outfitters. But when comparing it to its historical volatility, SP Global is 2.24 times less risky than Urban Outfitters. It trades about 0.08 of its potential returns per unit of risk. Urban Outfitters is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,649 in Urban Outfitters on November 9, 2024 and sell it today you would earn a total of 3,111 from holding Urban Outfitters or generate 117.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SP Global vs. Urban Outfitters
Performance |
| Timeline |
| SP Global |
| Urban Outfitters |
SP Global and Urban Outfitters Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SP Global and Urban Outfitters
The main advantage of trading using opposite SP Global and Urban Outfitters positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SP Global 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.| SP Global vs. MSCI Inc | SP Global vs. Nasdaq Inc | SP Global vs. Intercontinental Exchange | SP Global vs. CME Group |
| Urban Outfitters vs. American Eagle Outfitters | Urban Outfitters vs. Foot Locker | Urban Outfitters vs. Childrens Place | Urban Outfitters vs. Abercrombie Fitch |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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