Correlation Between Under Armour and VF
Can any of the company-specific risk be diversified away by investing in both Under Armour and VF 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 VF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Under Armour and VF Corporation, you can compare the effects of market volatilities on Under Armour and VF 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 VF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Under Armour and VF.
Diversification Opportunities for Under Armour and VF
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Under and VF is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Under Armour and VF Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VF Corporation 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 VF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VF Corporation has no effect on the direction of Under Armour i.e., Under Armour and VF go up and down completely randomly.
Pair Corralation between Under Armour and VF
Assuming the 90 days trading horizon Under Armour is expected to under-perform the VF. But the stock apears to be less risky and, when comparing its historical volatility, Under Armour is 2.4 times less risky than VF. The stock trades about -0.16 of its potential returns per unit of risk. The VF Corporation is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 6,560 in VF Corporation on October 15, 2024 and sell it today you would earn a total of 419.00 from holding VF Corporation or generate 6.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Under Armour vs. VF Corp.
Performance |
| Timeline |
| Under Armour |
| VF Corporation |
Under Armour and VF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Under Armour and VF
The main advantage of trading using opposite Under Armour and VF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Under Armour position performs unexpectedly, VF 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 VF will offset losses from the drop in VF's long position.| Under Armour vs. Sumitomo Mitsui Financial | Under Armour vs. Truist Financial | Under Armour vs. Jefferies Financial Group | Under Armour vs. Zoom Video Communications |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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