Correlation Between Under Armour and YY
Can any of the company-specific risk be diversified away by investing in both Under Armour and YY 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 YY 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 YY Inc Class, you can compare the effects of market volatilities on Under Armour and YY 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 YY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Under Armour and YY.
Diversification Opportunities for Under Armour and YY
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Under and YY is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Under Armour C and YY Inc Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YY Inc Class 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 YY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YY Inc Class has no effect on the direction of Under Armour i.e., Under Armour and YY go up and down completely randomly.
Pair Corralation between Under Armour and YY
Allowing for the 90-day total investment horizon Under Armour C is expected to under-perform the YY. But the stock apears to be less risky and, when comparing its historical volatility, Under Armour C is 1.39 times less risky than YY. The stock trades about -0.11 of its potential returns per unit of risk. The YY Inc Class is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 3,025 in YY Inc Class on January 25, 2024 and sell it today you would earn a total of 313.00 from holding YY Inc Class or generate 10.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Under Armour C vs. YY Inc Class
Performance |
| Timeline |
| Under Armour C |
| YY Inc Class |
Under Armour and YY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Under Armour and YY
The main advantage of trading using opposite Under Armour and YY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Under Armour position performs unexpectedly, YY 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 YY will offset losses from the drop in YY's long position.| 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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