Correlation Between Talon International and Under Armour

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

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

Diversification Opportunities for Talon International and Under Armour

-0.59

Correlation Coefficient

Talon International  Under Armour

Excellent diversification

The 3 months correlation between Talon and Under is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Talon International and Under Armour A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Under Armour A and Talon International 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 Talon International 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 A has no effect on the direction of Talon International i.e., Talon International and Under Armour go up and down completely randomly.

Pair Corralation between Talon International and Under Armour

If you would invest  792.00  in Under Armour A on September 15, 2024 and sell it today you would earn a total of  89.00  from holding Under Armour A or generate 11.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

Talon International  vs.  Under Armour A

Talon International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Talon International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, Talon International is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Under Armour A

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Under Armour A are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, Under Armour sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Talon International and Under Armour

The main advantage of trading using opposite Talon International and Under Armour positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Talon International 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 Talon International and Under Armour A 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.