Correlation Between Tyson Foods and Under Armour
Can any of the company-specific risk be diversified away by investing in both Tyson Foods 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 Tyson Foods and Under Armour into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tyson Foods and Under Armour, you can compare the effects of market volatilities on Tyson Foods 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 Tyson Foods with a short position of Under Armour. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tyson Foods and Under Armour.
Diversification Opportunities for Tyson Foods and Under Armour
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tyson and Under is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Tyson Foods and Under Armour in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Under Armour and Tyson Foods 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 Tyson Foods 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 has no effect on the direction of Tyson Foods i.e., Tyson Foods and Under Armour go up and down completely randomly.
Pair Corralation between Tyson Foods and Under Armour
Assuming the 90 days trading horizon Tyson Foods is expected to generate 2.86 times less return on investment than Under Armour. But when comparing it to its historical volatility, Tyson Foods is 1.29 times less risky than Under Armour. It trades about 0.11 of its potential returns per unit of risk. Under Armour is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 4,955 in Under Armour on September 13, 2024 and sell it today you would earn a total of 499.00 from holding Under Armour or generate 10.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 85.71% |
| Values | Daily Returns |
Tyson Foods vs. Under Armour
Performance |
| Timeline |
| Tyson Foods |
| Under Armour |
Tyson Foods and Under Armour Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tyson Foods and Under Armour
The main advantage of trading using opposite Tyson Foods and Under Armour positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tyson Foods 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.| Tyson Foods vs. SLC Agrcola SA | Tyson Foods vs. Minerva SA | Tyson Foods vs. BrasilAgro Companhia | Tyson Foods vs. Bahema Educao SA |
| Under Armour vs. Charter Communications | Under Armour vs. Broadcom | Under Armour vs. Electronic Arts | Under Armour vs. Delta Air Lines |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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