Correlation Between Under Armour and Weibo Corp
Can any of the company-specific risk be diversified away by investing in both Under Armour and Weibo Corp 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 Weibo Corp 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 Weibo Corp, you can compare the effects of market volatilities on Under Armour and Weibo Corp 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 Weibo Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Under Armour and Weibo Corp.
Diversification Opportunities for Under Armour and Weibo Corp
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Under and Weibo is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Under Armour C and Weibo Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weibo Corp 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 Weibo Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weibo Corp has no effect on the direction of Under Armour i.e., Under Armour and Weibo Corp go up and down completely randomly.
Pair Corralation between Under Armour and Weibo Corp
Allowing for the 90-day total investment horizon Under Armour C is expected to generate 1.96 times more return on investment than Weibo Corp. However, Under Armour is 1.96 times more volatile than Weibo Corp. It trades about 0.11 of its potential returns per unit of risk. Weibo Corp is currently generating about 0.11 per unit of risk. If you would invest 790.00 in Under Armour C on September 1, 2024 and sell it today you would earn a total of 87.00 from holding Under Armour C or generate 11.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Under Armour C vs. Weibo Corp
Performance |
| Timeline |
| Under Armour C |
| Weibo Corp |
Under Armour and Weibo Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Under Armour and Weibo Corp
The main advantage of trading using opposite Under Armour and Weibo Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Under Armour position performs unexpectedly, Weibo Corp 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 Weibo Corp will offset losses from the drop in Weibo Corp's long position.| Under Armour vs. Levi Strauss Co | Under Armour vs. Columbia Sportswear | Under Armour vs. Hanesbrands | Under Armour vs. PVH Corp |
| Weibo Corp vs. MediaAlpha | Weibo Corp vs. Asset Entities Class | Weibo Corp vs. Shutterstock | Weibo Corp vs. Match Group |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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