Correlation Between Urban Outfitters and MOWI ASA
Can any of the company-specific risk be diversified away by investing in both Urban Outfitters and MOWI ASA 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 MOWI ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Urban Outfitters and MOWI ASA SPADR, you can compare the effects of market volatilities on Urban Outfitters and MOWI ASA 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 MOWI ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Urban Outfitters and MOWI ASA.
Diversification Opportunities for Urban Outfitters and MOWI ASA
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Urban and MOWI is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Urban Outfitters and MOWI ASA SPADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOWI ASA SPADR 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 MOWI ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOWI ASA SPADR has no effect on the direction of Urban Outfitters i.e., Urban Outfitters and MOWI ASA go up and down completely randomly.
Pair Corralation between Urban Outfitters and MOWI ASA
Assuming the 90 days horizon Urban Outfitters is expected to generate 1.78 times more return on investment than MOWI ASA. However, Urban Outfitters is 1.78 times more volatile than MOWI ASA SPADR. It trades about 0.44 of its potential returns per unit of risk. MOWI ASA SPADR is currently generating about -0.15 per unit of risk. If you would invest 4,780 in Urban Outfitters on October 12, 2024 and sell it today you would earn a total of 770.00 from holding Urban Outfitters or generate 16.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Urban Outfitters vs. MOWI ASA SPADR
Performance |
| Timeline |
| Urban Outfitters |
| MOWI ASA SPADR |
Urban Outfitters and MOWI ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Urban Outfitters and MOWI ASA
The main advantage of trading using opposite Urban Outfitters and MOWI ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Urban Outfitters position performs unexpectedly, MOWI ASA 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 MOWI ASA will offset losses from the drop in MOWI ASA's long position.| Urban Outfitters vs. DAIDO METAL TD | Urban Outfitters vs. Forsys Metals Corp | Urban Outfitters vs. ANTA SPORTS PRODUCT | Urban Outfitters vs. STORE ELECTRONIC |
| MOWI ASA vs. CHRYSALIS INVESTMENTS LTD | MOWI ASA vs. New Residential Investment | MOWI ASA vs. Acadia Healthcare | MOWI ASA vs. Urban Outfitters |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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