Correlation Between URBAN OUTFITTERS and Advanced Micro
Can any of the company-specific risk be diversified away by investing in both URBAN OUTFITTERS and Advanced Micro 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 Advanced Micro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between URBAN OUTFITTERS and Advanced Micro Devices, you can compare the effects of market volatilities on URBAN OUTFITTERS and Advanced Micro 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 Advanced Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of URBAN OUTFITTERS and Advanced Micro.
Diversification Opportunities for URBAN OUTFITTERS and Advanced Micro
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between URBAN and Advanced is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding URBAN OUTFITTERS and Advanced Micro Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Micro Devices 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 Advanced Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Micro Devices has no effect on the direction of URBAN OUTFITTERS i.e., URBAN OUTFITTERS and Advanced Micro go up and down completely randomly.
Pair Corralation between URBAN OUTFITTERS and Advanced Micro
Assuming the 90 days trading horizon URBAN OUTFITTERS is expected to generate 0.95 times more return on investment than Advanced Micro. However, URBAN OUTFITTERS is 1.05 times less risky than Advanced Micro. It trades about 0.05 of its potential returns per unit of risk. Advanced Micro Devices is currently generating about -0.04 per unit of risk. If you would invest 3,940 in URBAN OUTFITTERS on November 5, 2024 and sell it today you would earn a total of 1,260 from holding URBAN OUTFITTERS or generate 31.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
URBAN OUTFITTERS vs. Advanced Micro Devices
Performance |
| Timeline |
| URBAN OUTFITTERS |
| Advanced Micro Devices |
URBAN OUTFITTERS and Advanced Micro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with URBAN OUTFITTERS and Advanced Micro
The main advantage of trading using opposite URBAN OUTFITTERS and Advanced Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if URBAN OUTFITTERS position performs unexpectedly, Advanced Micro 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 Advanced Micro will offset losses from the drop in Advanced Micro's long position.| URBAN OUTFITTERS vs. Mitsubishi Materials | URBAN OUTFITTERS vs. GOODYEAR T RUBBER | URBAN OUTFITTERS vs. Goodyear Tire Rubber | URBAN OUTFITTERS vs. ETFS Coffee ETC |
| Advanced Micro vs. PRECISION DRILLING P | Advanced Micro vs. Semiconductor Manufacturing International | Advanced Micro vs. Tower Semiconductor | Advanced Micro vs. Nordic Semiconductor ASA |
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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