Correlation Between Under Armour and Digital Brands
Can any of the company-specific risk be diversified away by investing in both Under Armour and Digital Brands 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 Digital Brands 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 Digital Brands Group, you can compare the effects of market volatilities on Under Armour and Digital Brands 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 Digital Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Under Armour and Digital Brands.
Diversification Opportunities for Under Armour and Digital Brands
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Under and Digital is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Under Armour C and Digital Brands Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital Brands Group 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 Digital Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital Brands Group has no effect on the direction of Under Armour i.e., Under Armour and Digital Brands go up and down completely randomly.
Pair Corralation between Under Armour and Digital Brands
If you would invest (100.00) in Digital Brands Group on December 7, 2024 and sell it today you would earn a total of 100.00 from holding Digital Brands Group or generate -100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Under Armour C vs. Digital Brands Group
Performance |
Timeline |
Under Armour C |
Digital Brands Group |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Under Armour and Digital Brands Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Under Armour and Digital Brands
The main advantage of trading using opposite Under Armour and Digital Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Under Armour position performs unexpectedly, Digital Brands 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 Digital Brands will offset losses from the drop in Digital Brands' long position.Under Armour vs. Levi Strauss Co | Under Armour vs. Columbia Sportswear | Under Armour vs. Hanesbrands | Under Armour vs. PVH Corp |
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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