Correlation Between Integral and Under Armour

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

By analyzing existing cross correlation between Integral Ad Science and Under Armour C, you can compare the effects of market volatilities on Integral 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 Integral with a short position of Under Armour. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integral and Under Armour.

Diversification Opportunities for Integral and Under Armour

0.15

Correlation Coefficient

Integral  Under Armour

Average diversification

The 3 months correlation between Integral and Under is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Integral Ad Science 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 Integral 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 Integral Ad Science 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 Integral i.e., Integral and Under Armour go up and down completely randomly.

Pair Corralation between Integral and Under Armour

Considering the 90-day investment horizon Integral Ad Science is expected to generate 0.5 times more return on investment than Under Armour. However, Integral Ad Science is 2.01 times less risky than Under Armour. It trades about -0.11 of its potential returns per unit of risk. Under Armour C is currently generating about -0.07 per unit of risk. If you would invest  1,085  in Integral Ad Science on September 21, 2024 and sell it today you would lose (41.00) from holding Integral Ad Science or give up 3.78% of portfolio value over 90 days.

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

Integral Ad Science  vs.  Under Armour C

Integral Ad Science

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Integral Ad Science has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Integral is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Under Armour C

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Under Armour C are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, Under Armour may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Integral and Under Armour

The main advantage of trading using opposite Integral and Under Armour positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integral 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.

The idea behind Integral Ad Science and Under Armour C 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.