Correlation Between URBAN OUTFITTERS and United Overseas

Can any of the company-specific risk be diversified away by investing in both URBAN OUTFITTERS and United Overseas 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 URBAN OUTFITTERS and United Overseas into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between URBAN OUTFITTERS and United Overseas Bank, you can compare the effects of market volatilities on URBAN OUTFITTERS and United Overseas 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 URBAN OUTFITTERS with a short position of United Overseas. Check out your portfolio center. Please also check ongoing floating volatility patterns of URBAN OUTFITTERS and United Overseas.

Diversification Opportunities for URBAN OUTFITTERS and United Overseas

0.23

Correlation Coefficient

URBAN OUTFITTERS  United Overseas

Modest diversification

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

Pair Corralation between URBAN OUTFITTERS and United Overseas

Assuming the 90 days trading horizon URBAN OUTFITTERS is expected to under-perform the United Overseas. In addition to that, URBAN OUTFITTERS is 1.93 times more volatile than United Overseas Bank. It trades about -0.08 of its total potential returns per unit of risk. United Overseas Bank is currently generating about 0.01 per unit of volatility. If you would invest  2,556  in United Overseas Bank on December 20, 2024 and sell it today you would earn a total of  14.00  from holding United Overseas Bank or generate 0.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

URBAN OUTFITTERS  vs.  United Overseas Bank

URBAN OUTFITTERS

Risk-Adjusted Performance

Very Weak

Over the last 90 days URBAN OUTFITTERS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

United Overseas Bank

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in United Overseas Bank are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, United Overseas is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with URBAN OUTFITTERS and United Overseas

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

The idea behind URBAN OUTFITTERS and United Overseas Bank 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.