Correlation Between Tyson Foods and Under Armour
Can any of the company-specific risk be diversified away by investing in both Tyson Foods and Under Armour 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 Tyson Foods and Under Armour into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tyson Foods and Under Armour C, you can compare the effects of market volatilities on Tyson Foods and Under Armour 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 Tyson Foods with a short position of Under Armour. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tyson Foods and Under Armour.
Diversification Opportunities for Tyson Foods and Under Armour
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Tyson and Under is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Tyson Foods and Under Armour C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Under Armour C and Tyson Foods 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 Tyson Foods are associated (or correlated) with Under Armour. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Under Armour C has no effect on the direction of Tyson Foods i.e., Tyson Foods and Under Armour go up and down completely randomly.
Pair Corralation between Tyson Foods and Under Armour
Considering the 90-day investment horizon Tyson Foods is expected to generate 0.71 times more return on investment than Under Armour. However, Tyson Foods is 1.4 times less risky than Under Armour. It trades about 0.01 of its potential returns per unit of risk. Under Armour C is currently generating about -0.01 per unit of risk. If you would invest 6,003 in Tyson Foods on January 26, 2024 and sell it today you would earn a total of 129.00 from holding Tyson Foods or generate 2.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tyson Foods vs. Under Armour C
Performance |
| Timeline |
| Tyson Foods |
| Under Armour C |
Tyson Foods and Under Armour Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tyson Foods and Under Armour
The main advantage of trading using opposite Tyson Foods and Under Armour positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tyson Foods position performs unexpectedly, Under Armour 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 Under Armour will offset losses from the drop in Under Armour's long position.| Tyson Foods vs. Cal Maine Foods | Tyson Foods vs. Dole PLC | Tyson Foods vs. Adecoagro SA | Tyson Foods vs. Fresh Del Monte |
| Under Armour vs. Levi Strauss Co | Under Armour vs. Columbia Sportswear | Under Armour vs. Hanesbrands | Under Armour vs. PVH Corp |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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