Correlation Between Under Armour and Grupo Aeroportuario

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

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

Diversification Opportunities for Under Armour and Grupo Aeroportuario

-0.37

Correlation Coefficient

Under Armour  Grupo Aeroportuario

Very good diversification

The 3 months correlation between Under and Grupo is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Under Armour C and Grupo Aeroportuario del in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Aeroportuario del and Under Armour 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 Under Armour C are associated (or correlated) with Grupo Aeroportuario. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Aeroportuario del has no effect on the direction of Under Armour i.e., Under Armour and Grupo Aeroportuario go up and down completely randomly.

Pair Corralation between Under Armour and Grupo Aeroportuario

Allowing for the 90-day total investment horizon Under Armour C is expected to under-perform the Grupo Aeroportuario. But the stock apears to be less risky and, when comparing its historical volatility, Under Armour C is 1.17 times less risky than Grupo Aeroportuario. The stock trades about -0.19 of its potential returns per unit of risk. The Grupo Aeroportuario del is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  26,511  in Grupo Aeroportuario del on December 26, 2024 and sell it today you would earn a total of  1,634  from holding Grupo Aeroportuario del or generate 6.16% return on investment over 90 days.

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

Under Armour C  vs.  Grupo Aeroportuario del

Under Armour C

Risk-Adjusted Performance

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 unsteady performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Grupo Aeroportuario del

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Aeroportuario del are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Grupo Aeroportuario may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Under Armour and Grupo Aeroportuario

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

The idea behind Under Armour C and Grupo Aeroportuario del 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.