Correlation Between URBAN OUTFITTERS and Stanley Electric
Can any of the company-specific risk be diversified away by investing in both URBAN OUTFITTERS and Stanley Electric 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 Stanley Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between URBAN OUTFITTERS and Stanley Electric Co, you can compare the effects of market volatilities on URBAN OUTFITTERS and Stanley Electric 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 Stanley Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of URBAN OUTFITTERS and Stanley Electric.
Diversification Opportunities for URBAN OUTFITTERS and Stanley Electric
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between URBAN and Stanley is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding URBAN OUTFITTERS and Stanley Electric Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stanley Electric 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 Stanley Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stanley Electric has no effect on the direction of URBAN OUTFITTERS i.e., URBAN OUTFITTERS and Stanley Electric go up and down completely randomly.
Pair Corralation between URBAN OUTFITTERS and Stanley Electric
Assuming the 90 days trading horizon URBAN OUTFITTERS is expected to generate 1.84 times more return on investment than Stanley Electric. However, URBAN OUTFITTERS is 1.84 times more volatile than Stanley Electric Co. It trades about 0.36 of its potential returns per unit of risk. Stanley Electric Co is currently generating about -0.13 per unit of risk. If you would invest 4,920 in URBAN OUTFITTERS on October 13, 2024 and sell it today you would earn a total of 630.00 from holding URBAN OUTFITTERS or generate 12.8% 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. Stanley Electric Co
Performance |
| Timeline |
| URBAN OUTFITTERS |
| Stanley Electric |
URBAN OUTFITTERS and Stanley Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with URBAN OUTFITTERS and Stanley Electric
The main advantage of trading using opposite URBAN OUTFITTERS and Stanley Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if URBAN OUTFITTERS position performs unexpectedly, Stanley Electric 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 Stanley Electric will offset losses from the drop in Stanley Electric's long position.| URBAN OUTFITTERS vs. Chunghwa Telecom Co | URBAN OUTFITTERS vs. Shenandoah Telecommunications | URBAN OUTFITTERS vs. Datadog | URBAN OUTFITTERS vs. Information Services International Dentsu |
| Stanley Electric vs. MTY Food Group | Stanley Electric vs. REVO INSURANCE SPA | Stanley Electric vs. URBAN OUTFITTERS | Stanley Electric vs. Erste Group Bank |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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