Correlation Between Under Armour and Emerson Radio
Can any of the company-specific risk be diversified away by investing in both Under Armour and Emerson Radio 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 Emerson Radio 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 Emerson Radio, you can compare the effects of market volatilities on Under Armour and Emerson Radio 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 Emerson Radio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Under Armour and Emerson Radio.
Diversification Opportunities for Under Armour and Emerson Radio
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Under and Emerson is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Under Armour C and Emerson Radio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerson Radio 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 Emerson Radio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerson Radio has no effect on the direction of Under Armour i.e., Under Armour and Emerson Radio go up and down completely randomly.
Pair Corralation between Under Armour and Emerson Radio
Allowing for the 90-day total investment horizon Under Armour C is expected to generate 0.94 times more return on investment than Emerson Radio. However, Under Armour C is 1.06 times less risky than Emerson Radio. It trades about 0.02 of its potential returns per unit of risk. Emerson Radio is currently generating about 0.0 per unit of risk. If you would invest 860.00 in Under Armour C on September 13, 2024 and sell it today you would earn a total of 16.50 from holding Under Armour C or generate 1.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Under Armour C vs. Emerson Radio
Performance |
| Timeline |
| Under Armour C |
| Emerson Radio |
Under Armour and Emerson Radio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Under Armour and Emerson Radio
The main advantage of trading using opposite Under Armour and Emerson Radio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Under Armour position performs unexpectedly, Emerson Radio 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 Emerson Radio will offset losses from the drop in Emerson Radio's long position.| Under Armour vs. Levi Strauss Co | Under Armour vs. Columbia Sportswear | Under Armour vs. Hanesbrands | Under Armour vs. PVH Corp |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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