Correlation Between Neo Concept and Under Armour

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

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

Diversification Opportunities for Neo Concept and Under Armour

-0.02

Correlation Coefficient

Neo Concept  Under Armour

Good diversification

The 3 months correlation between Neo and Under is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Neo Concept International Grou and Under Armour C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Under Armour C and Neo Concept 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 Neo Concept International Group 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 C has no effect on the direction of Neo Concept i.e., Neo Concept and Under Armour go up and down completely randomly.

Pair Corralation between Neo Concept and Under Armour

Considering the 90-day investment horizon Neo Concept International Group is expected to generate 5.0 times more return on investment than Under Armour. However, Neo Concept is 5.0 times more volatile than Under Armour C. It trades about 0.22 of its potential returns per unit of risk. Under Armour C is currently generating about -0.12 per unit of risk. If you would invest  52.00  in Neo Concept International Group on October 23, 2024 and sell it today you would earn a total of  17.00  from holding Neo Concept International Group or generate 32.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Neo Concept International Grou  vs.  Under Armour C

Neo Concept Internat

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Neo Concept International Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly abnormal fundamental indicators, Neo Concept demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Under Armour C

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Under Armour C has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Under Armour is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Neo Concept and Under Armour

The main advantage of trading using opposite Neo Concept and Under Armour positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neo Concept 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 Neo Concept International Group and Under Armour C 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.