Correlation Between Under Armour and Kontoor Brands
Can any of the company-specific risk be diversified away by investing in both Under Armour and Kontoor 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 Kontoor 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 Kontoor Brands, you can compare the effects of market volatilities on Under Armour and Kontoor 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 Kontoor Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Under Armour and Kontoor Brands.
Diversification Opportunities for Under Armour and Kontoor Brands
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Under and Kontoor is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Under Armour C and Kontoor Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kontoor Brands 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 Kontoor Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kontoor Brands has no effect on the direction of Under Armour i.e., Under Armour and Kontoor Brands go up and down completely randomly.
Pair Corralation between Under Armour and Kontoor Brands
Allowing for the 90-day total investment horizon Under Armour C is expected to generate 0.69 times more return on investment than Kontoor Brands. However, Under Armour C is 1.44 times less risky than Kontoor Brands. It trades about -0.18 of its potential returns per unit of risk. Kontoor Brands is currently generating about -0.14 per unit of risk. If you would invest 756.00 in Under Armour C on December 27, 2024 and sell it today you would lose (155.00) from holding Under Armour C or give up 20.5% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Under Armour C vs. Kontoor Brands
Performance |
Timeline |
Under Armour C |
Kontoor Brands |
Under Armour and Kontoor Brands Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Under Armour and Kontoor Brands
The main advantage of trading using opposite Under Armour and Kontoor Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Under Armour position performs unexpectedly, Kontoor 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 Kontoor Brands will offset losses from the drop in Kontoor Brands' long position.Under Armour vs. Levi Strauss Co | Under Armour vs. Columbia Sportswear | Under Armour vs. Hanesbrands | Under Armour vs. PVH Corp |
Kontoor Brands vs. Vince Holding Corp | Kontoor Brands vs. Ermenegildo Zegna NV | Kontoor Brands vs. Columbia Sportswear | Kontoor Brands vs. Gildan Activewear |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |