Correlation Between Urban Outfitters and Addtech AB

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

By analyzing existing cross correlation between Urban Outfitters and Addtech AB, you can compare the effects of market volatilities on Urban Outfitters and Addtech AB 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 Urban Outfitters with a short position of Addtech AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Urban Outfitters and Addtech AB.

Diversification Opportunities for Urban Outfitters and Addtech AB

0.15

Correlation Coefficient

Urban Outfitters  Addtech AB

Average diversification

The 3 months correlation between Urban and Addtech is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Urban Outfitters and Addtech AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addtech AB and Urban Outfitters 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 Urban Outfitters are associated (or correlated) with Addtech AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addtech AB has no effect on the direction of Urban Outfitters i.e., Urban Outfitters and Addtech AB go up and down completely randomly.

Pair Corralation between Urban Outfitters and Addtech AB

Assuming the 90 days horizon Urban Outfitters is expected to generate 1.55 times more return on investment than Addtech AB. However, Urban Outfitters is 1.55 times more volatile than Addtech AB. It trades about 0.0 of its potential returns per unit of risk. Addtech AB is currently generating about -0.02 per unit of risk. If you would invest  6,084  in Urban Outfitters on July 12, 2025 and sell it today you would lose (124.00) from holding Urban Outfitters or give up 2.04% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Urban Outfitters  vs.  Addtech AB

Urban Outfitters

Risk-Adjusted Performance

Weakest

Over the last 90 days Urban Outfitters has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Urban Outfitters is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Addtech AB

Risk-Adjusted Performance

Weakest

Over the last 90 days Addtech AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Addtech AB is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Urban Outfitters and Addtech AB

The main advantage of trading using opposite Urban Outfitters and Addtech AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Urban Outfitters position performs unexpectedly, Addtech AB 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 Addtech AB will offset losses from the drop in Addtech AB's long position.

The idea behind Urban Outfitters and Addtech AB 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.