Correlation Between Urban Outfitters and Gelsenwasser
Can any of the company-specific risk be diversified away by investing in both Urban Outfitters and Gelsenwasser 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 Gelsenwasser into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Urban Outfitters and Gelsenwasser AG, you can compare the effects of market volatilities on Urban Outfitters and Gelsenwasser 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 Gelsenwasser. Check out your portfolio center. Please also check ongoing floating volatility patterns of Urban Outfitters and Gelsenwasser.
Diversification Opportunities for Urban Outfitters and Gelsenwasser
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Urban and Gelsenwasser is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Urban Outfitters and Gelsenwasser AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gelsenwasser AG 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 Gelsenwasser. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gelsenwasser AG has no effect on the direction of Urban Outfitters i.e., Urban Outfitters and Gelsenwasser go up and down completely randomly.
Pair Corralation between Urban Outfitters and Gelsenwasser
Assuming the 90 days horizon Urban Outfitters is expected to generate 0.99 times more return on investment than Gelsenwasser. However, Urban Outfitters is 1.01 times less risky than Gelsenwasser. It trades about 0.29 of its potential returns per unit of risk. Gelsenwasser AG is currently generating about 0.05 per unit of risk. If you would invest 5,000 in Urban Outfitters on October 15, 2024 and sell it today you would earn a total of 500.00 from holding Urban Outfitters or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Urban Outfitters vs. Gelsenwasser AG
Performance |
| Timeline |
| Urban Outfitters |
| Gelsenwasser AG |
Urban Outfitters and Gelsenwasser Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Urban Outfitters and Gelsenwasser
The main advantage of trading using opposite Urban Outfitters and Gelsenwasser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Urban Outfitters position performs unexpectedly, Gelsenwasser 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 Gelsenwasser will offset losses from the drop in Gelsenwasser's long position.| Urban Outfitters vs. Aegean Airlines SA | Urban Outfitters vs. United Airlines Holdings | Urban Outfitters vs. Zoom Video Communications | Urban Outfitters vs. Boyd Gaming |
| Gelsenwasser vs. Playmates Toys Limited | Gelsenwasser vs. Advanced Medical Solutions | Gelsenwasser vs. Urban Outfitters | Gelsenwasser vs. AIR PRODCHEMICALS |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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