Correlation Between ReTo Eco and Under Armour

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

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

Diversification Opportunities for ReTo Eco and Under Armour

0.18

Correlation Coefficient

ReTo Eco  Under Armour

Average diversification

The 3 months correlation between ReTo and Under is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding ReTo Eco Solutions 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 ReTo Eco 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 ReTo Eco Solutions 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 ReTo Eco i.e., ReTo Eco and Under Armour go up and down completely randomly.

Pair Corralation between ReTo Eco and Under Armour

Given the investment horizon of 90 days ReTo Eco Solutions is expected to generate 0.81 times more return on investment than Under Armour. However, ReTo Eco Solutions is 1.23 times less risky than Under Armour. It trades about -0.43 of its potential returns per unit of risk. Under Armour C is currently generating about -0.39 per unit of risk. If you would invest  107.00  in ReTo Eco Solutions on October 12, 2024 and sell it today you would lose (20.00) from holding ReTo Eco Solutions or give up 18.69% of portfolio value over 90 days.

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

ReTo Eco Solutions  vs.  Under Armour C

ReTo Eco Solutions

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ReTo Eco Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

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 latest unsteady performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with ReTo Eco and Under Armour

The main advantage of trading using opposite ReTo Eco and Under Armour positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ReTo Eco 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 ReTo Eco Solutions 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 Global Correlations module to find global opportunities by holding instruments from different markets.