Correlation Between Under Armour and Livetech
Can any of the company-specific risk be diversified away by investing in both Under Armour and Livetech 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 Under Armour and Livetech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Under Armour and Livetech da Bahia, you can compare the effects of market volatilities on Under Armour and Livetech 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 Under Armour with a short position of Livetech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Under Armour and Livetech.
Diversification Opportunities for Under Armour and Livetech
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Under and Livetech is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Under Armour and Livetech da Bahia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Livetech da Bahia and Under Armour 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 Under Armour are associated (or correlated) with Livetech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Livetech da Bahia has no effect on the direction of Under Armour i.e., Under Armour and Livetech go up and down completely randomly.
Pair Corralation between Under Armour and Livetech
Assuming the 90 days trading horizon Under Armour is expected to generate 1.21 times more return on investment than Livetech. However, Under Armour is 1.21 times more volatile than Livetech da Bahia. It trades about 0.03 of its potential returns per unit of risk. Livetech da Bahia is currently generating about -0.02 per unit of risk. If you would invest 4,320 in Under Armour on August 30, 2024 and sell it today you would earn a total of 880.00 from holding Under Armour or generate 20.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.8% |
| Values | Daily Returns |
Under Armour vs. Livetech da Bahia
Performance |
| Timeline |
| Under Armour |
| Livetech da Bahia |
Under Armour and Livetech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Under Armour and Livetech
The main advantage of trading using opposite Under Armour and Livetech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Under Armour position performs unexpectedly, Livetech 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 Livetech will offset losses from the drop in Livetech's long position.| Under Armour vs. Paycom Software | Under Armour vs. Zoom Video Communications | Under Armour vs. Charter Communications | Under Armour vs. Metalurgica Gerdau SA |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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