Correlation Between Under Armour and 06050WHM0

Can any of the company-specific risk be diversified away by investing in both Under Armour and 06050WHM0 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 06050WHM0 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 US06050WHM01, you can compare the effects of market volatilities on Under Armour and 06050WHM0 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 06050WHM0. Check out your portfolio center. Please also check ongoing floating volatility patterns of Under Armour and 06050WHM0.

Diversification Opportunities for Under Armour and 06050WHM0

0.39

Correlation Coefficient

Under Armour  06050WHM0

Weak diversification

The 3 months correlation between Under and 06050WHM0 is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Under Armour C and US06050WHM01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US06050WHM01 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 06050WHM0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US06050WHM01 has no effect on the direction of Under Armour i.e., Under Armour and 06050WHM0 go up and down completely randomly.

Pair Corralation between Under Armour and 06050WHM0

Allowing for the 90-day total investment horizon Under Armour C is expected to under-perform the 06050WHM0. But the stock apears to be less risky and, when comparing its historical volatility, Under Armour C is 1.09 times less risky than 06050WHM0. The stock trades about -0.16 of its potential returns per unit of risk. The US06050WHM01 is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  8,835  in US06050WHM01 on December 29, 2024 and sell it today you would earn a total of  422.00  from holding US06050WHM01 or generate 4.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	55.74%
Values	Daily Returns

Under Armour C  vs.  US06050WHM01

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.

US06050WHM01

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in US06050WHM01 are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, 06050WHM0 may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Under Armour and 06050WHM0

The main advantage of trading using opposite Under Armour and 06050WHM0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Under Armour position performs unexpectedly, 06050WHM0 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 06050WHM0 will offset losses from the drop in 06050WHM0's long position.

The idea behind Under Armour C and US06050WHM01 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.