Correlation Between Under Armour and EZGO Technologies
Can any of the company-specific risk be diversified away by investing in both Under Armour and EZGO Technologies 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 EZGO Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Under Armour A and EZGO Technologies, you can compare the effects of market volatilities on Under Armour and EZGO Technologies 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 EZGO Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Under Armour and EZGO Technologies.
Diversification Opportunities for Under Armour and EZGO Technologies
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Under and EZGO is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Under Armour A and EZGO Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EZGO Technologies 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 A are associated (or correlated) with EZGO Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EZGO Technologies has no effect on the direction of Under Armour i.e., Under Armour and EZGO Technologies go up and down completely randomly.
Pair Corralation between Under Armour and EZGO Technologies
Considering the 90-day investment horizon Under Armour A is expected to generate 0.49 times more return on investment than EZGO Technologies. However, Under Armour A is 2.05 times less risky than EZGO Technologies. It trades about -0.25 of its potential returns per unit of risk. EZGO Technologies is currently generating about -0.16 per unit of risk. If you would invest 1,016 in Under Armour A on December 1, 2024 and sell it today you would lose (335.00) from holding Under Armour A or give up 32.97% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Under Armour A vs. EZGO Technologies
Performance |
Timeline |
Under Armour A |
EZGO Technologies |
Under Armour and EZGO Technologies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Under Armour and EZGO Technologies
The main advantage of trading using opposite Under Armour and EZGO Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Under Armour position performs unexpectedly, EZGO Technologies 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 EZGO Technologies will offset losses from the drop in EZGO Technologies' long position.Under Armour vs. Levi Strauss Co | Under Armour vs. Hanesbrands | Under Armour vs. VF Corporation | Under Armour vs. Ralph Lauren Corp |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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