Correlation Between Wearable Devices and Under Armour
Can any of the company-specific risk be diversified away by investing in both Wearable Devices and Under Armour 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 Wearable Devices and Under Armour into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wearable Devices and Under Armour A, you can compare the effects of market volatilities on Wearable Devices and Under Armour 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 Wearable Devices with a short position of Under Armour. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wearable Devices and Under Armour.
Diversification Opportunities for Wearable Devices and Under Armour
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Wearable and Under is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Wearable Devices and Under Armour A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Under Armour A and Wearable Devices 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 Wearable Devices are associated (or correlated) with Under Armour. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Under Armour A has no effect on the direction of Wearable Devices i.e., Wearable Devices and Under Armour go up and down completely randomly.
Pair Corralation between Wearable Devices and Under Armour
Given the investment horizon of 90 days Wearable Devices is expected to under-perform the Under Armour. In addition to that, Wearable Devices is 2.05 times more volatile than Under Armour A. It trades about -0.09 of its total potential returns per unit of risk. Under Armour A is currently generating about 0.06 per unit of volatility. If you would invest 891.00 in Under Armour A on August 30, 2024 and sell it today you would earn a total of 79.00 from holding Under Armour A or generate 8.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 97.73% |
| Values | Daily Returns |
Wearable Devices vs. Under Armour A
Performance |
| Timeline |
| Wearable Devices |
| Under Armour A |
Wearable Devices and Under Armour Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wearable Devices and Under Armour
The main advantage of trading using opposite Wearable Devices and Under Armour positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wearable Devices position performs unexpectedly, Under Armour 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 Under Armour will offset losses from the drop in Under Armour's long position.| Wearable Devices vs. Koss Corporation | Wearable Devices vs. Wearable Devices | Wearable Devices vs. Sonos Inc | Wearable Devices vs. LG Display Co |
| Under Armour vs. Levi Strauss Co | Under Armour vs. Hanesbrands | Under Armour vs. VF Corporation | Under Armour vs. Ralph Lauren Corp |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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