Correlation Between URBAN OUTFITTERS and CK Infrastructure
Can any of the company-specific risk be diversified away by investing in both URBAN OUTFITTERS and CK Infrastructure 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 CK Infrastructure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between URBAN OUTFITTERS and CK Infrastructure Holdings, you can compare the effects of market volatilities on URBAN OUTFITTERS and CK Infrastructure 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 CK Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of URBAN OUTFITTERS and CK Infrastructure.
Diversification Opportunities for URBAN OUTFITTERS and CK Infrastructure
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between URBAN and CHH is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding URBAN OUTFITTERS and CK Infrastructure Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CK Infrastructure 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 CK Infrastructure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CK Infrastructure has no effect on the direction of URBAN OUTFITTERS i.e., URBAN OUTFITTERS and CK Infrastructure go up and down completely randomly.
Pair Corralation between URBAN OUTFITTERS and CK Infrastructure
Assuming the 90 days trading horizon URBAN OUTFITTERS is expected to generate 2.32 times less return on investment than CK Infrastructure. But when comparing it to its historical volatility, URBAN OUTFITTERS is 1.45 times less risky than CK Infrastructure. It trades about 0.06 of its potential returns per unit of risk. CK Infrastructure Holdings is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 249.00 in CK Infrastructure Holdings on September 14, 2024 and sell it today you would earn a total of 378.00 from holding CK Infrastructure Holdings or generate 151.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
URBAN OUTFITTERS vs. CK Infrastructure Holdings
Performance |
| Timeline |
| URBAN OUTFITTERS |
| CK Infrastructure |
URBAN OUTFITTERS and CK Infrastructure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with URBAN OUTFITTERS and CK Infrastructure
The main advantage of trading using opposite URBAN OUTFITTERS and CK Infrastructure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if URBAN OUTFITTERS position performs unexpectedly, CK Infrastructure 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 CK Infrastructure will offset losses from the drop in CK Infrastructure's long position.| URBAN OUTFITTERS vs. Apple Inc | URBAN OUTFITTERS vs. Apple Inc | URBAN OUTFITTERS vs. Apple Inc | URBAN OUTFITTERS vs. Apple Inc |
| CK Infrastructure vs. INSURANCE AUST GRP | CK Infrastructure vs. MSAD INSURANCE | CK Infrastructure vs. URBAN OUTFITTERS | CK Infrastructure vs. Singapore Reinsurance |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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