Correlation Between Under Armour and Xiabuxiabu Catering

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

Diversification Opportunities for Under Armour and Xiabuxiabu Catering

-0.28

Correlation Coefficient

Under Armour  Xiabuxiabu Catering

Very good diversification

The 3 months correlation between Under and Xiabuxiabu is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Under Armour C and Xiabuxiabu Catering Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiabuxiabu Catering 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 Xiabuxiabu Catering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiabuxiabu Catering has no effect on the direction of Under Armour i.e., Under Armour and Xiabuxiabu Catering go up and down completely randomly.

Pair Corralation between Under Armour and Xiabuxiabu Catering

Allowing for the 90-day total investment horizon Under Armour C is expected to generate 4.86 times more return on investment than Xiabuxiabu Catering. However, Under Armour is 4.86 times more volatile than Xiabuxiabu Catering Management. It trades about -0.01 of its potential returns per unit of risk. Xiabuxiabu Catering Management is currently generating about -0.13 per unit of risk. If you would invest  820.00  in Under Armour C on September 26, 2024 and sell it today you would lose (62.00) from holding Under Armour C or give up 7.56% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Under Armour C  vs.  Xiabuxiabu Catering Management

Under Armour C

Risk-Adjusted Performance

0 of 100

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 somewhat strong basic indicators, Under Armour is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Xiabuxiabu Catering

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xiabuxiabu Catering Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Under Armour and Xiabuxiabu Catering

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

The idea behind Under Armour C and Xiabuxiabu Catering Management 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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.