Correlation Between Under Armour and Lucid
Can any of the company-specific risk be diversified away by investing in both Under Armour and Lucid 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 Lucid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Under Armour C and Lucid Group, you can compare the effects of market volatilities on Under Armour and Lucid 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 Lucid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Under Armour and Lucid.
Diversification Opportunities for Under Armour and Lucid
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Under and Lucid is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Under Armour C and Lucid Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lucid Group 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 C are associated (or correlated) with Lucid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lucid Group has no effect on the direction of Under Armour i.e., Under Armour and Lucid go up and down completely randomly.
Pair Corralation between Under Armour and Lucid
Allowing for the 90-day total investment horizon Under Armour C is expected to generate 0.56 times more return on investment than Lucid. However, Under Armour C is 1.77 times less risky than Lucid. It trades about 0.02 of its potential returns per unit of risk. Lucid Group is currently generating about -0.03 per unit of risk. If you would invest 840.00 in Under Armour C on August 27, 2024 and sell it today you would earn a total of 32.00 from holding Under Armour C or generate 3.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Under Armour C vs. Lucid Group
Performance |
| Timeline |
| Under Armour C |
| Lucid Group |
Under Armour and Lucid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Under Armour and Lucid
The main advantage of trading using opposite Under Armour and Lucid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Under Armour position performs unexpectedly, Lucid 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 Lucid will offset losses from the drop in Lucid's long position.| 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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