Correlation Between Under Armour and United Homes
Can any of the company-specific risk be diversified away by investing in both Under Armour and United Homes 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 United Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Under Armour A and United Homes Group, you can compare the effects of market volatilities on Under Armour and United Homes 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 United Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Under Armour and United Homes.
Diversification Opportunities for Under Armour and United Homes
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Under and United is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Under Armour A and United Homes Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Homes 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 A are associated (or correlated) with United Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Homes Group has no effect on the direction of Under Armour i.e., Under Armour and United Homes go up and down completely randomly.
Pair Corralation between Under Armour and United Homes
Considering the 90-day investment horizon Under Armour A is expected to generate 0.99 times more return on investment than United Homes. However, Under Armour A is 1.01 times less risky than United Homes. It trades about 0.08 of its potential returns per unit of risk. United Homes Group is currently generating about 0.04 per unit of risk. If you would invest 719.00 in Under Armour A on August 29, 2024 and sell it today you would earn a total of 251.00 from holding Under Armour A or generate 34.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Under Armour A vs. United Homes Group
Performance |
| Timeline |
| Under Armour A |
| United Homes Group |
Under Armour and United Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Under Armour and United Homes
The main advantage of trading using opposite Under Armour and United Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Under Armour position performs unexpectedly, United Homes 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 United Homes will offset losses from the drop in United Homes' long position.| Under Armour vs. Levi Strauss Co | Under Armour vs. Hanesbrands | Under Armour vs. VF Corporation | Under Armour vs. Ralph Lauren Corp |
| United Homes vs. Marine Products | United Homes vs. Rumble Inc | United Homes vs. Kaltura | United Homes vs. Bill Com Holdings |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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