Correlation Between URBAN OUTFITTERS and Grenke AG
Can any of the company-specific risk be diversified away by investing in both URBAN OUTFITTERS and Grenke AG 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 Grenke AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between URBAN OUTFITTERS and Grenke AG, you can compare the effects of market volatilities on URBAN OUTFITTERS and Grenke AG 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 Grenke AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of URBAN OUTFITTERS and Grenke AG.
Diversification Opportunities for URBAN OUTFITTERS and Grenke AG
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between URBAN and Grenke is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding URBAN OUTFITTERS and Grenke AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grenke 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 Grenke AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grenke AG has no effect on the direction of URBAN OUTFITTERS i.e., URBAN OUTFITTERS and Grenke AG go up and down completely randomly.
Pair Corralation between URBAN OUTFITTERS and Grenke AG
Assuming the 90 days trading horizon URBAN OUTFITTERS is expected to generate 2.34 times more return on investment than Grenke AG. However, URBAN OUTFITTERS is 2.34 times more volatile than Grenke AG. It trades about 0.31 of its potential returns per unit of risk. Grenke AG is currently generating about -0.2 per unit of risk. If you would invest 3,640 in URBAN OUTFITTERS on September 13, 2024 and sell it today you would earn a total of 1,260 from holding URBAN OUTFITTERS or generate 34.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
URBAN OUTFITTERS vs. Grenke AG
Performance |
| Timeline |
| URBAN OUTFITTERS |
| Grenke AG |
URBAN OUTFITTERS and Grenke AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with URBAN OUTFITTERS and Grenke AG
The main advantage of trading using opposite URBAN OUTFITTERS and Grenke AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if URBAN OUTFITTERS position performs unexpectedly, Grenke AG 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 Grenke AG will offset losses from the drop in Grenke AG's long position.| URBAN OUTFITTERS vs. Apple Inc | URBAN OUTFITTERS vs. Apple Inc | URBAN OUTFITTERS vs. Apple Inc | URBAN OUTFITTERS vs. Apple Inc |
| Grenke AG vs. Bumrungrad Hospital Public | Grenke AG vs. ATRYS HEALTH SA | Grenke AG vs. Spirent Communications plc | Grenke AG vs. EHEALTH |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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