Correlation Between Under Armour and Mosaic

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

Diversification Opportunities for Under Armour and Mosaic

0.23

Correlation Coefficient

Under Armour  Mosaic

Modest diversification

The 3 months correlation between Under and Mosaic is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Under Armour C and The Mosaic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mosaic 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 Mosaic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mosaic has no effect on the direction of Under Armour i.e., Under Armour and Mosaic go up and down completely randomly.

Pair Corralation between Under Armour and Mosaic

Allowing for the 90-day total investment horizon Under Armour C is expected to generate 1.31 times more return on investment than Mosaic. However, Under Armour is 1.31 times more volatile than The Mosaic. It trades about 0.01 of its potential returns per unit of risk. The Mosaic is currently generating about -0.03 per unit of risk. If you would invest  881.00  in Under Armour C on September 19, 2024 and sell it today you would lose (98.00) from holding Under Armour C or give up 11.12% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Under Armour C  vs.  The Mosaic

Under Armour C

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Under Armour C are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, Under Armour may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Mosaic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Mosaic has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Mosaic is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Under Armour and Mosaic

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

The idea behind Under Armour C and The Mosaic 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.