Correlation Between Minerals Technologies and Under Armour

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

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

Diversification Opportunities for Minerals Technologies and Under Armour

0.77

Correlation Coefficient

Minerals Technologies  Under Armour

Poor diversification

The 3 months correlation between Minerals and Under is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Minerals Technologies 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 Minerals Technologies 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 Minerals Technologies 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 Minerals Technologies i.e., Minerals Technologies and Under Armour go up and down completely randomly.

Pair Corralation between Minerals Technologies and Under Armour

Considering the 90-day investment horizon Minerals Technologies is expected to generate 0.43 times more return on investment than Under Armour. However, Minerals Technologies is 2.31 times less risky than Under Armour. It trades about 0.08 of its potential returns per unit of risk. Under Armour C is currently generating about 0.03 per unit of risk. If you would invest  7,295  in Minerals Technologies on September 20, 2024 and sell it today you would earn a total of  587.00  from holding Minerals Technologies or generate 8.05% return on investment over 90 days.

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

Minerals Technologies  vs.  Under Armour C

Minerals Technologies

Risk-Adjusted Performance

6 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Minerals Technologies are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Minerals Technologies may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Under Armour C

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Under Armour C are ranked lower than 2 (%) 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 Minerals Technologies and Under Armour

The main advantage of trading using opposite Minerals Technologies and Under Armour positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Minerals Technologies 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 Minerals Technologies 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.