Correlation Between Under Armour and HEAR Old

Can any of the company-specific risk be diversified away by investing in both Under Armour and HEAR Old 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 HEAR Old 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 HEAR Old, you can compare the effects of market volatilities on Under Armour and HEAR Old 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 HEAR Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Under Armour and HEAR Old.

Diversification Opportunities for Under Armour and HEAR Old

0.0

Correlation Coefficient

Under Armour  HEAR Old

Pay attention - limited upside

The 3 months correlation between Under and HEAR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Under Armour C and HEAR Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEAR Old 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 HEAR Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEAR Old has no effect on the direction of Under Armour i.e., Under Armour and HEAR Old go up and down completely randomly.

Pair Corralation between Under Armour and HEAR Old

If you would invest (100.00) in HEAR Old on December 20, 2024 and sell it today you would earn a total of  100.00  from holding HEAR Old 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.  HEAR Old

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 inconsistent 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.

HEAR Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days HEAR Old has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, HEAR Old is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Under Armour and HEAR Old

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

The idea behind Under Armour C and HEAR Old 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.