Correlation Between Urban Outfitters and Fortune Brands
Can any of the company-specific risk be diversified away by investing in both Urban Outfitters and Fortune Brands 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 Urban Outfitters and Fortune Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Urban Outfitters and Fortune Brands Home, you can compare the effects of market volatilities on Urban Outfitters and Fortune Brands 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 Urban Outfitters with a short position of Fortune Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Urban Outfitters and Fortune Brands.
Diversification Opportunities for Urban Outfitters and Fortune Brands
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Urban and Fortune is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Urban Outfitters and Fortune Brands Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortune Brands Home and Urban Outfitters 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 Urban Outfitters are associated (or correlated) with Fortune Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortune Brands Home has no effect on the direction of Urban Outfitters i.e., Urban Outfitters and Fortune Brands go up and down completely randomly.
Pair Corralation between Urban Outfitters and Fortune Brands
Assuming the 90 days horizon Urban Outfitters is expected to generate 5.29 times less return on investment than Fortune Brands. In addition to that, Urban Outfitters is 1.78 times more volatile than Fortune Brands Home. It trades about 0.01 of its total potential returns per unit of risk. Fortune Brands Home is currently generating about 0.13 per unit of volatility. If you would invest 6,550 in Fortune Brands Home on November 2, 2024 and sell it today you would earn a total of 300.00 from holding Fortune Brands Home or generate 4.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Urban Outfitters vs. Fortune Brands Home
Performance |
| Timeline |
| Urban Outfitters |
| Fortune Brands Home |
Urban Outfitters and Fortune Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Urban Outfitters and Fortune Brands
The main advantage of trading using opposite Urban Outfitters and Fortune Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Urban Outfitters position performs unexpectedly, Fortune Brands 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 Fortune Brands will offset losses from the drop in Fortune Brands' long position.| Urban Outfitters vs. Firan Technology Group | Urban Outfitters vs. AMAG Austria Metall | Urban Outfitters vs. Cognizant Technology Solutions | Urban Outfitters vs. Transport International Holdings |
| Fortune Brands vs. Nippon Light Metal | Fortune Brands vs. SIERRA METALS | Fortune Brands vs. BJs Restaurants | Fortune Brands vs. Kaiser Aluminum |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |