Correlation Between Amer Sports, and YETI Holdings

Can any of the company-specific risk be diversified away by investing in both Amer Sports, and YETI Holdings 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 Amer Sports, and YETI Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Amer Sports, and YETI Holdings, you can compare the effects of market volatilities on Amer Sports, and YETI Holdings 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 Amer Sports, with a short position of YETI Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amer Sports, and YETI Holdings.

Diversification Opportunities for Amer Sports, and YETI Holdings

0.34

Correlation Coefficient

Amer Sports,  YETI Holdings

Weak diversification

The 3 months correlation between Amer and YETI is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Amer Sports, and YETI Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YETI Holdings and Amer Sports, 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 Amer Sports, are associated (or correlated) with YETI Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YETI Holdings has no effect on the direction of Amer Sports, i.e., Amer Sports, and YETI Holdings go up and down completely randomly.

Pair Corralation between Amer Sports, and YETI Holdings

Allowing for the 90-day total investment horizon Amer Sports, is expected to generate 1.27 times more return on investment than YETI Holdings. However, Amer Sports, is 1.27 times more volatile than YETI Holdings. It trades about 0.4 of its potential returns per unit of risk. YETI Holdings is currently generating about -0.5 per unit of risk. If you would invest  2,688  in Amer Sports, on October 13, 2024 and sell it today you would earn a total of  401.00  from holding Amer Sports, or generate 14.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Amer Sports,  vs.  YETI Holdings

Amer Sports,

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amer Sports, are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Amer Sports, unveiled solid returns over the last few months and may actually be approaching a breakup point.

YETI Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days YETI Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, YETI Holdings is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Amer Sports, and YETI Holdings

The main advantage of trading using opposite Amer Sports, and YETI Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amer Sports, position performs unexpectedly, YETI Holdings 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 YETI Holdings will offset losses from the drop in YETI Holdings' long position.

The idea behind Amer Sports, and YETI Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.