Correlation Between Auddia and Under Armour

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

By analyzing existing cross correlation between Auddia Inc and Under Armour A, you can compare the effects of market volatilities on Auddia 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 Auddia with a short position of Under Armour. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auddia and Under Armour.

Diversification Opportunities for Auddia and Under Armour

0.09

Correlation Coefficient

Auddia  Under Armour

Significant diversification

The 3 months correlation between Auddia and Under is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Auddia Inc 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 Auddia 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 Auddia Inc 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 Auddia i.e., Auddia and Under Armour go up and down completely randomly.

Pair Corralation between Auddia and Under Armour

Assuming the 90 days horizon Auddia Inc is expected to generate 5.95 times more return on investment than Under Armour. However, Auddia is 5.95 times more volatile than Under Armour A. It trades about 0.03 of its potential returns per unit of risk. Under Armour A is currently generating about -0.17 per unit of risk. If you would invest  2.76  in Auddia Inc on September 16, 2024 and sell it today you would lose (0.26) from holding Auddia Inc or give up 9.42% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	52.38%
Values	Daily Returns

Auddia Inc  vs.  Under Armour A

Auddia Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Auddia Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly weak fundamental indicators, Auddia showed solid returns over the last few months and may actually be approaching a breakup point.

Under Armour A

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Under Armour A are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, Under Armour sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Auddia and Under Armour

The main advantage of trading using opposite Auddia and Under Armour positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auddia 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.

The idea behind Auddia Inc and Under Armour A 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.

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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.